TOKYO — Kanebo Ltd. has decided to withdraw from the production of acrylic fibers at the end of the year.
Kanebo produces acrylic fibers through its wholly owned subsidiary, Kanebo Gosen, Ltd. It decided to withdraw from the sector because of the poor prospects for long-term recovery of the Japanese acrylic fiber market and other difficulties.
Kanebo said it will close Kanebo Gosen’s acrylic fiber plant in Bofu in western Japan and also the spinning and knitting facilities in Hikone, east of Kyoto.
The Bofu plant, which employs 142 people, produced 48 million pounds of acrylic fiber in the year ending March 31. The Hikone mill, with a workforce of 45, turned out 4.4 million pounds of spun yarn and 3.3 million linear meters of fabrics in the same period. All together, the closures will translate to a loss of $61.7 million, or 7.4 billion yen, in sales of acrylic fiber and related products for Kanebo. Sales have been on a decline after peaking at $109 million in 1997. The decision puts an end to the 31-year history of acrylic fiber manufacturing at Kanebo, which began producing acrylic staple at the Bofu plant in 1972.
Kanebo said its acrylic fiber business has been ridden with continuing deficits because of the shrinking domestic market and growing business risks from both rising raw material prices and fluctuating foreign exchange. The company depends on export markets for more than 80 percent of its acrylic fiber sales.
Negotiations are under way between management and labor on relocation of the employees involved, Kanebo noted.
Under its new business strategy, Kanebo said the company is shifting its emphasis to specialty polyester products, bio-decomposing “Lactron” polylactic acid textiles and other non-price-competitive products.
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