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Chemicals giant Teijin to close Jurong Island plant, sell the site
TOKYO-listed chemical and pharmaceutical company Teijin is closing its polycarbonate resin plant in Singapore by year's end and putting the industrial facility on Jurong Island up for sale through an expression of interest.
The plan to shutter is part of the company's restructuring exercise of its loss-making businesses.
Hurt particularly by high energy costs, the Singapore plant, which began operations in October 1999, has also been beaten by low-cost China rivals, the company said last November.
It has four production lines, producing polycarbonate resin for automotive components, office automation equipment and optical disks, among other things.
Teijin shut one production line down last October and another last month; the remaining two will go by year end, Nikkei Asian Review reported last November.
Teijin will scale back on its production of commoditised products under its restructuring exercise, and move its production of polycarbonate resin to its subsidiary in China and to its plant in Matsuyama in Japan, which it considers especially suited to the development of high-performance products, the company said.
Hanai Tomoyuki, accounting and finance manager at Teijin Polycarbonate Singapore, told The Business Times that Teijin's other affiliate company in Singapore, which undertakes the marketing of carbon fibre, will continue operating.
Daniel Siow, principal analyst at global chemical data provider IHS Chemical, said that Teijin's Singapore subsidiary used to be highly dependent on the electronics sector in South-east Asia, which has suffered an erosion of demand in recent years. Globally, the optical grade for applications such as optical storage disks has been reduced dramatically in recent years, with new technology in storing and transferring of information having emerged, he added.
Teijin's exit from Jurong Island will be felt by Mitsui Chemicals, which supplies Teijin's main feedstock, BPA (bisphenol A).
But Saudi Arabian petrochemical giant Sabic and Germany-headquartered Convestro (previously known as Bayer MaterialScience) will benefit from the vacuum created by Teijin's exit, he said.
As of now, six of Teijin's sales and marketing staff in Singapore have been retrenched. Mr Siow estimated that, by year end, 140 to 150 more staff will be retrenched, though a handful could be retained for a short period to help customers through the transition, he said.
He said that he understood that Teijin's branch office in Malaysia has also taken over the sales and marketing functions from Singapore.
Teijin declined to comment on the number of jobs that could be lost due to the sensitivity of the matter.
Mr Siow said: "Energy costs remains a bane of the petrochemical industry's existence in Singapore, and the appeal of Vietnam as a competitive manufacturing hub in South-east Asia appears to benefit petrochemical plants in the region, especially Thailand and Taiwan."
Colliers International Group said on Monday that it has been appointed for the sale of Teijin's 1.5 million square foot facility.
The site along Sakra Avenue on Jurong Island has a remaining tenure of 12 years and an option to renew the lease for another 30 years.
Tan Boon Leong, executive director of Collier's industrial services, said: "This is most probably the first time in 20 years that land of such a considerable size in Jurong Island is made available for private sale.
"A long tenure of industrial land leases - in this case, 42 years - is also becoming rare in recent years."
Under the 2014 Master Plan, Teijin's site is categorised for Business 2 use, with a maximum approved plot ratio of one. It includes purpose-built ancillary buildings, including warehouses, office and laboratory buildings, main and utility sub-stations and equipment rooms.
Under the reinstatement requirement by JTC Corporation, all buildings and plants will be demolished, save for the sub-stations and the two warehouses, which have floor areas of some 64,720 sq ft and 58,520 sq ft.
The reinstatement works are expected to completed by end-2017, Colliers said. Interested parties are invited to submit their offers to Colliers by 4pm on Aug 12.
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