A Carbon Fibre Cluster Grows In South Carolina

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Teijin breaks ground on a US$ 600 million plant in Greenwood as global demand grows for the strong, lightweight material.

On June 1, Teijin broke ground for its US$ 600 million carbon fibre plant in Greenwood, S.C. South Carolina seems like a great place for carbon fibre producers to do business. Just two years before Teijin broke ground, fellow Japanese firm Toray Industries started work on a US$ 1.4 billion plant in Spartanburg. And Solvay, which has been producing carbon fibre in nearby Greenville since 1981, expanded in 2016.

Consultants attribute the unusual carbon fibre buildup to the state's business-friendly policies, low taxes, and moderate energy costs.

Teijin executives at the groundbreaking said that the plant should start up in 2020. The company expects to employ 220 people by 2030. Production from the plant will at first supply aerospace composite customers, said Toshiya Koyama, head of the company's material business group. Within 10 years, the firm expects to make automotive-grade fibre.

For the time being, the raw material to make the fibre, polyacrylonitrile (PAN), will come from Teijin's plant in Mishima, Japan.

The firm could decide in the future to make PAN at the Greenwood site. While much of Teijin's carbon fibre now goes to customers who make composite parts, Koyama said the firm's strategy is to move downstream into composites itself.

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To make that plan a reality, Teijin bought Continental Structural Plastics (CSP) in 2016 for US$ 825 million.

Michigan-based CSP is already a supplier of composite components to automakers.

Most of CSP's composites are reinforced with glass fibre. But CSP is making a limited number of carbon-fibre-reinforced cargo beds for the 2019 GMC Sierra Denali pickup trucks.

Given all the carbon fibre soon to come from South Carolina, the question of oversupply arises. The Solvay plant and the Teijin and Toray plants under construction are all within 100 km of each other.

Shukei Inui, manager of Teijin's carbon fibre business unit, pointed out that carbon fibre is a worldwide commodity.

At least in Teijin's case, the plan is to export some of the fibre to other countries. The decision to locate in Greenwood had mostly to do with utility and labour costs plus state incentives and support from community leaders.

Teijin competitor Toray also cites strong government support as a reason for setting up its fibre plant in Spartanburg.

The company started to scout for new sites as it was running out of room at its fibre operations in Decatur, Ala., according to Yasuo Suga, senior vice president of Toray's advanced composite division.

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Another reason was the proximity of Boeing's composite-making operations in Charleston, Suga added. The Spartanburg plant will begin to supply Boeing in 2019 after going through the aircraft maker's accreditation process, he said.

John Boyd, principal at Boyd Co., a location consulting firm, is not surprised that South Carolina ranks high on carbon fibre makers' site list. "South Carolina is the least costly of the 48 contiguous US states for manufacturing," he said.

Other benefits are the low rates of unionisation and the Port of Charleston, which he calls one of the best managed and least congested ports on the East Coast.

Also figuring into the Japanese makers' choice to locate in the state is the relatively low cost of shipping carbon fibre, said Dan Pichler, a carbon fibre expert at CarbConsult.

The fibres range in cost from about $17 per kilogram for industrial-grade fibre to $80 for most aerospace-grade material. It costs "only 1 to 2% of the fibre's value to ship it anywhere in the world," he said.

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And carbon fibre is set for a significant increase in demand, Pichler said. He expects global fibre consumption to more than double from 60,000 metric tons in 2015 to about 150,000 metric tons in 2025. Industrial applications, including for automotive, wind turbine, and other high-tech uses, will account for the lion's share of growth, Pichler predicted.

Aerospace use will continue to grow, but other industrial uses will outshine it, he said.

While producers have an excess of capacity today, by 2025 demand for the fibre will outstrip capacity, as wind energy market will surpass the automobile market for carbon fibre.

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