Synthetic Fiber Capacity Investments in the United States Limited to a Few

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Researched by Industrial Info Resources (Sugar Land, Texas)--Synthetic fiber production in the United States has become a very small market; some might even refer to it as a niche market. There are currently fewer than 60 plants operating in this segment of the U.S. Chemical Processing Industry (CPI) employing an estimated 17,200 people. Beginning in the mid-1990s, this segment of the CPI has been plagued with numerous plant closures - more than 20 in total. These closures and the demand for their products being met by cheaper overseas capacity have dealt some big blows to this segment of the CPI in recent years.

Despite these setbacks, this segment has seen capital and maintenance investments total more than $300 million annually for the past couple of years mainly because of major investments by a few significant players. Toray Carbon Fibers American Incorporated (Decatur, Alabama), a part of the Toray Group (Japan), has been the largest contributor to spending in this industry segment in recent years with several hundred million dollars invested in the construction and expansion of its Decatur carbon fibers plant. And Toray isn't done yet. Only recently completing a $250 million Phase III expansion of the plant site, the estimated $40 million Phase IV is expected to begin construction this year.

Carbon fibers will continue to be the leading investment product in this industry segment for 2008 and beyond. Applications for their use in the automotive industry and consumer products requiring durability and strength seem endless. Of the 14 projects identified in this industry segment for 2008, almost half of the investments will be for additional carbon fiber capacity in plant locations from Alabama to Wyoming.

DuPont's announcement earlier this year to spend big for new Kevlar capacity will dwarf any other single investment in this industry segment this year and likely for years to come. For more information, see related February 27, 2008, article - DuPont Hires E&C Firm, Invests in Additional Kevlar Capacity.

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