Toray Taps China

In Beijing late last month, Japan’s Toray Industries and China National BlueStar held a ceremonial ground-breaking for a $73 million plant that will produce reverse-osmosis membranes for water purification.

The venture, owned 50.1% by Toray and 49.9% by BlueStar, is based on a simple principle: The Japanese side provides the technology, and the Chinese side contributes a local sales network. Whereas Toray is a world-class inventor and producer of water treatment membranes, BlueStar is one of China’s largest chemical ­conglomerates.

“I hope that our technology can provide solutions to some of China’s water shortages and environmental challenges,” Sadayuki Sakakibara, president and chief executive of Toray, said at the event.

China is probably the world’s most dynamic market for companies active in water treatment (C&EN, May 11, page 18). Its planned fix for the growing water shortages plaguing the northern part of the country has long been to build huge canals to divert water from the south. But the government is increasingly looking at recycling of waste water and desalination of seawater as more environmentally sound solutions.

The Toray-BlueStar venture is unique in that it puts world-class reverse-osmosis technology within the embrace of a Chinese firm. The new plant, which manufactures high-throughput polyamide composite membranes and assembles them into reverse-osmosis filters, will be located on the premises of a BlueStar chemical complex. Until now, reverse-osmosis membranes made by Chinese companies have been far less advanced than the ones produced by international players.

At the ground-breaking ceremony, officials from both companies dismissed the notion that BlueStar could steal Toray’s technology for the purpose of producing membranes on its own. A BlueStar official, who was not authorized to speak to the media, pointed out that all key positions in the new venture will be held by Toray executives. A Toray spokeswoman told C&EN that big Chinese companies have moved beyond seeking such short-term gains.

Moreover, Toray and BlueStar are looking at expanding their partnership to other areas. Made up of a disparate assortment of state-owned chemical companies, BlueStar perceives that it needs to upgrade its management, product range, and competitiveness. As part of this process, two years ago, the firm sold 20% of itself to the Blackstone Group, one of the world’s largest private equity firms.

Conversely, Toray is keen to expand in China, a market that can compensate for the lack of business opportunities in Japan. As one of Japan’s leading materials producers, Toray possesses proprietary technology in many fields, including fibers and electronic materials.

“If this project is successful, we will consider expanding our collaboration with our Chinese partner,” Sakakibara told C&EN. “We are not sure in which areas; it’s all to be decided in the future.”