Sojitz and Ube Material Industries Invest in Lime Business in China
- Aim is to Acquire High-Quality Limestone Sources and Capture the Top Share of the Rapidly-Growing Asian Market -
Aug. 17, 2011
Ube Material Industries, Ltd.
Sojitz Corporation and Ube Material Industries, Ltd., a leading domestic producer of lime-related products, will invest in Sunland (Qingyang) Mining and Chemical Industry Co., Ltd., a lime producer located in Qingyang County, Chizhou City in China’s Anhui Province approximately 500 km west of Shanghai, with the aim of securing limestone sources in China and entering the lime production business.
Sojitz, Ube Material and Sunhill (Hong Kong) Investment Limited, Sunland’s parent company, will establish a new holding company called Sunlime Ltd. with Sojitz and Ube Material holding a combined 51% interest (43.77% by Sojitz and 7.23% by Ube Material). Total investment will be $8.5 million (approximately 700 million Japanese yen).
Sunland’s lime production plant and limestone mine
Lime is produced by burning (calcinating) limestone and is widely used in industry for iron making, paper & pulp, petrochemicals, fertilizer, building material, and other applications as well as environmental measures including improving water quality, amending soil, and processing exhaust gases. Sunland’s limestone sources contain high levels of calcium oxide and low impurity levels, making it possible to produce high-quality lime products. The lime products currently produced by Sunland are sold primarily to iron and paper making companies, but Sojitz and Ube Material plan to expand sales for environmental applications such as exhaust gas processing and soil amendment, areas of rapid growth in China.
Global demand for lime products in 2009 was about 300 million tons with a value in excess of 2 trillion yen. Demand in China accounted for about 200 million tons of the total. As China’s economy develops, the market for lime is growing at about 10% annually. Demand is also growing in other developing countries including India and ASEAN countries, and global demand is expected to double to 600 million tons by 2016.
Sojitz and Ube Material will sell the lime products produced at the Sunland plant to industrial regions in China and export some to South Korea, Taiwan, and other countries. Sunland plans to expand production from 120,000 tons annually now to 300,000 tons annually within three years, and to further increase production to 700,000 tons annually in the following five to 10 years. Sojitz and Ube Material are investigating additional opportunities to expand business in Asia and seek to increase production sites in India and Southeast Asia and ultimately acquire the top share of the Asian market.
|Sunland (Qingyang) Mining and ChemicalIndustry Co., Ltd.
|Qingyang County, Chizhou City, Anhui Province, China
|No. of employees
|Limestone mining and sale, lime production and sales