DIC to expand Chinese packaging-ink capacity 80%

TOKYO (Nikkei) -- DIC Corp. (4631) plans to expand Chinese production capacity for packaging material inks by 80% this year.

By December, the company will erect a new building at a plant in Nantong, Jiangsu Province, that makes pigments and printing ink for paper. Equipment will be installed there that can turn out 20,000 tons of ink annually for use on packaging films for foods and beverages. The expansion will cost 107 million yuan, or around 1.37 billion yen.

The new equipment will produce finished ink as well as intermediate products for adjusting colors. DIC currently has seven Chinese locations that produce packaging material inks, each of which makes its own intermediate materials. The company plans to reduce costs by consolidating production of intermediates to Nantong in stages.

In conjunction, a plant 50km from the Nantong site will get new urethane resin production equipment in 2013. Shipping urethane resin from there instead of from a plant in Guangdong Province will help reduce costs.

According to DIC, the Chinese packaging materials ink market is projected to expand to 350,000 tons in 2020, up 75% from 2011. The company aims to capture 20% of this market.

(The Nikkei Feb. 25 morning edition)

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