Toray May Double Output as Daimler, Boeing Favor Light Parts

Toray May Double Capacity as Daimler, Boeing Favor Lighter Parts
Carbon fiber manufactured by Toray Industries Inc. Source: Toray Industries Inc. via Bloomberg News

Toray Industries Inc., the world’s largest producer of carbon fiber, plans to increase capacity as customers from Daimler AG to Boeing Co. boost the use of the lightweight material to make fuel-efficient cars and planes.

Capacity at the end of the decade may double from a targeted level of 27,100 metric tons a year in 2015, Moriyuki Onishi, senior vice president and head of the carbon-fiber composites division, said in an interview.

Toray expects sales of carbon-fiber composite materials to increase 29 percent to 90 billion yen ($1.1 billion) in the financial year ending March 2013, or 5 percent of its estimated 1.7 trillion yen revenue, according to an Aug. 6 statement. The company and rival Teijin Ltd. forged partnerships with Daimler and General Motors Co., respectively, to develop and produce carbon-fiber parts for cars.

“Carbon fiber has big potential as automakers look into a variety of materials,” Onishi said in the interview on Sept. 5 in Tokyo, where Toray is based. “We’re trying to bring costs down and speed production through technology development.”

Ramp-up plans for Boeing’s 787, the first aircraft built with carbon-fiber reinforced plastic, and the launch of Airbus SAS’ A350 wide-body aircraft will enable Toray to boost aviation sales almost four times to 100 billion yen a year by the end of this decade, Onishi said.

The 787 Dreamliner, designed to be 20 percent more fuel efficient, uses lightweight composites for half of its structure, a departure from traditional reliance on aluminum. The A350 will compete with Boeing’s 787 and 777 long-range aircraft.

Capacity Expansion

Toray shares gained 3.7 percent, the most since Aug. 6, to close at 477 yen in Tokyo, paring their decline this year to 13 percent. Toray is the top producer of the material in the 40,000 ton-a-year global market, Onishi said.

The company said in March it would invest 45 billion yen to boost global carbon fiber output capacity 50 percent to 27,100 tons by 2015 as it builds its first plant in South Korea and expands plants and facilities in Japan, the U.S. and France.

Carbon fiber is about 10 times stronger and 75 percent lighter than steel, Toray said in a presentation. The cost of carbon fiber ranges from 2,000 yen to 5,000 yen a kilogram (2.2 pounds), according to Takato Watabe, a Tokyo-based analyst at Deutsche Securities Inc. Nippon Steel Corp., Japan’s biggest maker of the alloy, sold products for 800 yen a kilogram in the last quarter.

Luxury Cars

Toray’s carbon-fiber parts, including roofs and bonnets, are used in luxury sports cars including Toyota Motor Corp.’s Lexus LFA, the Mercedes-Benz and Volkswagen AG’s Lamborghini. While the current carbon-fiber market is limited to 5,000 supercars, it may expand to 5 million vehicles by 2020, according to a company presentation this month.

Teijin, the second-largest carbon-fiber maker, is working with GM to develop carbon-fiber composites using a new technology that cuts molding time to enable mass production.

Osaka-based Teijin said in December it plans to supply carbon-fiber parts to 1 million cars a year by 2020 and expects automotive sales from the new technology of as much as 200 billion yen a year.

Steelmakers, facing competition from producers of materials, including carbon fiber and aluminum, say the alloy will remain suitable for vehicles in the future.

WorldAutoSteel, the automotive group of the World Steel Association, including Nippon Steel, Posco and ArcelorMittal, said last year next-generation eco cars built with steel would be 35 percent lighter than gasoline-powered vehicles and cut total lifecycle carbon-dioxide emissions by about 70 percent, appealing to the auto industry.

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