Tokyo — Tosoh plans to reduce reliance on China and switch its isocyanates business focus to Asian, European and US markets as it moves up the value chain for MDI, according to its annual report.
The recently released summary of the year ended 31 March 2016, said the business faces a number of headwinds: “growing volatility in the polyurethane business climate amid raw material cost fluctuations, planned capacity increases by competitors, foreign exchange rate swings and Chinese market risks."
It said that managing the business had become easier following the full integration of Nippon Polyurethane Industry into Tosoh in mid-2015. This has helped to “accelerate decision-making, unify manufacturing, optimise research and development, and heighten management efficiency through a single management structure.”
The Urethane Division is now “contemplating additional MDI production capacity to increase the presence of Tosoh’s MDI products domestically and overseas,” the company said. It will also reinforce its MDI export sales structure, review its setup in China and become less reliant on that market.
The firm said it will “expand sales in Southeast and South Asia, which offer potential for stable demand.”
Tosoh said it has set up an MDI storage depot in Singapore to help it serve ASEAN markets. “At the same time, the division will strive for steady sales in North America,” the firm added.
In the future, monomeric MDI sales outside China are to be a priority, Tosoh said. The division will also promote sales of a more environmentally benign grade of monomeric MDI to meet growing demand from major footwear makers.
In addition, the Urethane Division is targeting a growing share of the overseas HDI market, primarily through expanded sales to US and European customers. The division also plans to expand of liquid polycarbonate diol for polyurethanes, Tosoh said.
The firm added that it will continue its shift to high-value-added MDI production, strengthen its functional urethanes, and move into system sales.
Tosoh reported sales of YEN 754 bn ($7.4 bn) in the year ending 31 March 2016 compared with Yen 810 bn in the year earlier.
Exchange rate: Xe.com 8 July 2016