Carbon fiber ramping up for planes, luxury cars

Tokyo 02/25/2006; The Asahi Shimbun reported that three major carbon fiber suppliers are increasing production capacity to meet soaring demand from aircraft and luxury auto manufacturers.

The material weighs only half as much as aluminum but is 10 times stronger than steel. Those factors are critical for airlines, in particular.

Light weight means better fuel efficiency, which translates into big savings in the face of rising oil prices.

Global demand for carbon fiber is estimated at 25,000 tons. Some analysts expect that demand will grow to 40,000 tons by 2010.

Toray Industries Inc., Toho Tenax Co. and Mitsubishi Rayon Co. together control about 70 percent of the global market.

Industry leader Toray, which holds a share of about 30 percent, is the main carbon fiber supplier for Boeing Co.'s B787 next-generation passenger aircraft.

The U.S. company has won orders for more than 300 B787s, and Toray will supply about 30 tons of carbon fiber per aircraft.

By volume, carbon fiber composite materials account for about 50 percent of the B787, including the fuselage and main wings. The aircraft, better known as the Dreamliner, is due to launch in 2008.

Partly to fill that order, Toray is adding new production lines on its 860,000-square-meter factory in Masaki, Ehime Prefecture.

The company is investing about 25 billion yen on three production lines, two for carbon fiber and the other for sheet products.

"We can't reveal where (the lines are being installed), and of course, visits are prohibited," a spokesperson said.

Toray is apparently nervous about possible leaks because carbon fiber production requires high-level technologies.

The company is also spending about 8 billion yen on capacity expansion at its French factory.

When the expansions go into full operation, they will boost Toray group's annual production capacity to 13,900 tons, up about 50 percent from the current 9,100 tons.

The No. 2 player, Toho Tenax, is running its factory in Nagaizumi, Shizuoka Prefecture, at full capacity to produce carbon fiber mainly for Airbus SAS's A380 super-jumbo jet, which is scheduled to start commercial flights this year.

The Teijin Ltd. affiliate is supplying other sectors, too.

"Demand is strong for blades of wind-power generators and components of luxury automobiles," Toho Tenax Director Takashi Mishima said. "We can also expect demand for offshore oil field equipment."

The company is expanding its factories in the United States and Germany to raise its annual group production capacity to 7,800 tons in September, up from the current 5,600 tons.

Mitsubishi Rayon is also adding capacity at its factory in Toyohashi, Aichi Prefecture, and its plants in the United States and France.

The company is aiming for an annual production capacity of about 8,000 tons by September 2007, up from the current 4,700 tons,

The carbon fiber manufacturers are being cautious about overproduction, however. They plan to supply only businesses with high profit margins, such as aircraft and high-end autos, at least for the time being.

The companies increased production in the late 1990s, leading to a supply glut and a substantial price drop.

In the future, the manufacturers expect to extend business to mass-production cars, saying that their next goal is to develop technologies that can produce carbon fiber in large quantities and at low prices.(IHT/Asahi: February 25,2006)