By Sam Nussey and Ritsuko Shimizu
TOKYO (Reuters) – Japanese chemical company Zeon aims to decide by the summer whether to move forward with plans it put on hold to expand production in the United States, its CEO said.
Zeon in January froze plans to expand capacity in Texas for producing binders used in lithium-ion batteries.
The company was uncertain over the outlook for the electric vehicle market following the election of President Donald Trump.
Zeon, a supplier to manufacturers of tyres, TVs and batteries, sees a business chance in manufacturing in the U.S. but also rising risk, its CEO said.
“Uncertainty around investment is increasing with the volatility in American society, regulation and other factors,” Tetsuya Toyoshima said in an interview.
“However in the mid-to-long term, given the growth of batteries, I feel the current situation should be seen as an opportunity. But things are changing day-to-day,” he said.
The Texas investment would total more 10 billion yen ($70.52 million).
Trump’s sweeping tariffs have sent shockwaves through global supply chains and are raising fear of an economic downturn.
“We can only see the tip of the iceberg and, not knowing how big this iceberg is, there is a feeling of fear,” Toyoshima said.
The company is maintaining a cash buffer and trying not to hold inventory, he said.
Customers have been pulling forward orders to the U.S. to build up inventory, Toyoshima said.
Zeon sells optical film to TV makers in China so could see an impact if TV sales to the U.S. drop, he said.
The first Japanese company to mass produce synthetic rubber, Zeon is investing 70 billion yen in a new factory in Yamaguchi prefecture in western Japan.
The plant will make speciality plastics as it targets demand from the life science and semiconductor sectors.
($1 = 141.8100 yen)
(Reporting by Sam Nussey and Ritsuko Shimizu; Editing by Christopher Cushing)
