Zeon will up its capacity in Singapore for a type of synthetic rubber favoured by tyre makers boosting their production of fuel-efficient tyres.
The leading Japanese maker of synthetic rubbers and high-function materials will invest roughly 7 billion yen ($57.8 million) to build a second factory in Singapore for solution-polymerized styrene-butadiene rubber, or S-SBR.
Once that factory is running in 2016, Zeon will be able to produce 70,000 tons of S-SBR a year in Singapore, exceeding the 55,000-ton capacity of its Tokuyama plant in Japan’s Yamaguchi Prefecture.
The global market for fuel-efficient tyres is forecast to grow by 60 % between 2012 and 2017 to $70 billion. By 2019, Bridgestone alone aims for sales of over 10 million such tyres, or roughly double the amount of 2013. Zeon sees this translating into 7-8% annual growth in demand for S-SBR, with around 1kg used per tyre.
The company opted to expand capacity in Singapore because the plants there are just a pipeline away from the basic ingredient butadiene, available in stable supplies from a nearby refinery operated by Royal Dutch Shell