Mitsui reduces TPA production

Facing spiking crude oil prices, Japan-based Mitsui Chemicals Inc. has shuttered one of its three production lines for high-purity terephthalic acid, the key ingredient for making polyester fiber, at a factory in Yamaguchi Prefecture. It is scheduled to decommission another production line by fiscal 2011. The two moves will slash the firm’s annual domestic output capacity for the acid by 47% to 400,000 metric tons. This is the first time the company has cut capacity for the product since starting production in Japan in 1976. They will also reduce global supply capacity by 14% from the current level to 2.25 million tons a year. The decision was prompted by worsening profitability that stemmed from surging transport costs and the increasing cost of naphtha, a material used to make terephthalic acid. Likewise, Mitsubishi Chemical also stopped exporting polyvinyl chloride resin, which is used to make construction materials, reducing its output capacity for the resin 30% by halting production at its factory in Okayama Prefecture. (July 14, 2008)