TOKYO & SHAOXING, China--()--Teijin Limited announced today that in September it will establish Zhejiang Jiaren New Materials Co., Ltd., a joint venture with Jinggong Holding Group, in Shaoxing, Zhejiang Province, China, one of China's largest production bases for fiber products.
Through the joint venture, Teijin will chemically recycle polyester, as well as manufacture and sell the resulting fibers, with the aim of establishing a closed-loop recycling system in China leveraging its advanced proprietary chemical recycling technology and the business expertise it has cultivated in the global expansion of ECO CIRCLETM, its existing closed-loop recycling system for polyester.
The joint venture, to which Teijin will contribute 49% and Jinggong Holding Group, a Shaoxing-based multinational enterprise involved with environmental management, will contribute 51%, will invest around 6 billion JPY in the construction of facilities for DMT (dimethyl terephthalate) production, polymerization and fiber spinning. The construction will begin this November, with operations scheduled to begin by the end of March, 2014. The joint venture is targeting annual sales of 10 billion JPY in the first year of business. It will be the first time for Teijin to operate polyester chemical recycling outside Japan.
The new plant will chemically recycle polyester fiber scraps and used polyester products into DMT with quality comparable to that derived directly from petroleum. The DMT will be used for the production of polyester resin, as well as value-added polyester fiber, leveraging the Teijin Group's polymer and fiber-spinning technologies. The facility will have a DMT production capacity of 20,000 tons per year in the initial phase. As demand grows, capacity will be expanded an additional 50,000 tons per year in the second phase, for a total annual DMT production capacity of 70,000 tons. Annual production capacity of recycled polyester fiber will be 19,000 tons in the initial phase.
This venture is the first step in the cooperative project agreed upon in March between Teijin and the China Chemical Fibers Association (CCFA) to pursue business opportunities in the field of chemical fibers and related industries in China.
Teijin will work with the CCFA, its recycled fiber committee, and the city of Shaoxing to establish a locally centered supply chain and design efficient institutional arrangements for chemical recycling to build a unique closed-loop recycling system for China and to make a contribution to energy conservation and environmental preservation. Teijin hopes to expand this closed-loop recycling business throughout China while working through the CCFA to encourage the government to enact legislation and design systems that will enable the nationwide spread of closed-loop systems.
The Chinese government has made energy conservation and environmental preservation a priority in its 12th five-year plan (2010-2015). In view of this trend, the CCFA is promoting sustainable development of the chemical fibers industry, with focus on energy savings, waste reduction and the construction of a recycling-oriented economy.
Interest in recycling has been increasing in China, and a method called material recycling, in which used products like plastic bottles are crushed and melted to recover polyester, is taking root. However, given the impracticality of removing dyes, pigments and processing agents in this process, the resulting products are lower in quality and eventually end up being incinerated as waste, curtailing material recycling's effectiveness in limiting the use of oil and reducing waste.
China is a high-priority market in the Teijin Group's medium- to long-term growth plan. The Group aims to expand business in China through strategic alliances with local partners, expansion of production and R&D bases, and development of environment-related businesses.
About China Chemical Fibers Association
The China Chemical Fibers Association is the only nationwide organization covering China's entire fiber industry. It is a non-profit organization established in 1993 and is made up of about 400 members from related businesses, universities and research institutions.
About Teijin's ECO CIRCLE™
Launched in 2002, ECO CIRCLE™ is an environmentally friendly closed-loop system incorporating the world's first technology for the chemical recycling of polyester, which Teijin Fibers developed in 2000. Teijin now works with more than 150 apparel and sportswear manufacturers worldwide to develop and manufacture products made from recyclable materials, as well as to collect and recycle these products at the end of their useful lives. The manufacturers include well-known brands such as Patagonia Inc. in the U.S., Henri Lloyd in the U.K. and Quiksilver Europe in France. In China, Teijin has been collaborating with Li Ning, the nation's largest sports apparel brand, since 2009.
At Teijin's chemical recycling plant in Japan, collected polyester items are chemically decomposed and converted into polyester raw material offering quality and purity comparable to polyester derived directly from petroleum. The raw material is then turned into high-quality polyester for the manufacture of new recyclable products. Repeated recycling achieved with the ECO CIRCLE™ system significantly reduces both energy consumption and carbon dioxide emissions compared to conventional petroleum-based processes for polyester production.
About the Teijin Group
Teijin (TOKYO:3401) is a technology-driven global group offering advanced solutions in the areas of sustainable transportation, information and electronics, safety and protection, environment and energy, and healthcare. Its main fields of operation are high-performance fibers such as aramid, carbon fibers & composites, healthcare, films, resin & plastic processing, polyester fibers, products converting and IT. The group has some 150 companies and around 17,000 employees spread out over 20 countries worldwide. It posted consolidated sales of JPY 854.4 billion (USD 10.7 billion) and total assets of JPY 762.1 billion (USD 9.5 billion) in the fiscal year ending March 31, 2012. Please visit www.teijin.co.jp/english.