UPDATE 3-Shin-Etsu needs Dow for paint chemical shipments
Thu Mar 22, 2007 6:10am ET
TOKYO, March 22 (Reuters) - Japan's Shin-Etsu Chemical Co. Ltd. said on Thursday it has asked Dow Chemical Co. and others to help it meet shipments of chemicals used in paint and cement following an explosion at a plant this week.
The explosion and subsequent fire at the Naoetsu plant in eastern Japan injured 17 workers and forced a halt in production of methylcellulose, which is also used to coat pills, on Tuesday.
Dow Chemical has agreed to supply the chemical compound, and Shin-Etsu, the world's largest silicon wafer maker, is also asking other overseas producers for help, Shin-Etsu President Chihiro Kanagawa told reporters.
Other makers of the substance include drugs and chemical group Bayer AG and Hercules Inc. unit Aqualon.
Shin-Etsu, which said the fire will have a minor impact on the company's earnings, estimates that it holds 30 percent of the global market in methylcellulose in a close race for top share with Dow Chemical.
Shin-Etsu's sales of the compound stand at roughly 50 billion to 55 billion yen ($425 million to $470 million), with about 20 billion yen to 25 billion yen coming from the Naoetsu plant, said Junichi Watanabe, director of Shin-Etsu's cellulose division.
The factory has an annual output of 23,000 tonnes, representing 37 percent of Shin-Etsu's total capacity of the chemical compound.
Shin-Etsu will buy methylcellulose used in construction materials from Dow and other suppliers, and the volume will depend on how long the plant remains closed in order to investigate the cause of the explosion, Kanagawa said.
Major pharmaceutical clients Takeda Pharmaceutical Co. and Kowa Co. will buy the compound directly from overseas producers, he said.
Shin-Etsu shares closed up 1.1 percent at 7,340 yen in a broadly higher market.
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