Bloomberg News

Japan Automakers May Avert Resin-Related Shutdown, Analyst Says

April 19, 2012

Automakers in Japan may avoid “large-scale” disruptions to production as suppliers prepare alternative parts in response to a global resin shortage, according to a Deutsche Bank AG analyst.

Suppliers recognized that PA-12, a resin used to make brake- and fuel-system components, was produced by few companies and are carrying several months’ supply, Takashi Moriwaki, an analyst for Frankfurt-based Deutsche Bank, wrote today in a research note. Auto-parts makers could supply parts with alternative materials as soon as June and plan to propose options to automakers within the next week, Moriwaki wrote, citing telephone interviews with companies he didn’t identify.

“Although we cannot discount the risk of production stoppages because the shortage of only one component is enough to compromise auto production, our interviews suggest little likelihood of large-scale shutdowns to Japan’s auto production,” Moriwaki wrote.

More than 200 executives from companies including General Motors Co. (GM:US), Volkswagen AG (VOW), Toyota Motor Corp. (7203) and Ford Motor Co. (F:US) met April 17 at a summit near Detroit to find other options for resin after a March 31 explosion at chemical maker Evonik Industries AG. The blast at Evonik’s Marl, Germany, factory that made Cyclododecatriene, also called CDT, halved the global source of PA-12.

Automakers and suppliers are unlikely to find immediate alternatives to the shortage of resin because of their pre- production vetting processes, researcher IHS Automotive said yesterday.

Technical Committees

Officials formed six technical committees aimed at mitigating the effect that the PA-12 shortage may have on production of parts and finished vehicles, Randi Berris, a spokeswoman for the Automotive Industry Action Group, wrote yesterday in an e-mail. The group is hosting “multiple technical follow-up meetings” during the next few weeks on the issue, she said.

TI Automotive Ltd. warned its customers in an April 12 letter of severe shortages interrupting production “in the next few weeks.” The Auburn Hills, Michigan-based company supplies brake and fuel lines, as well as fuel tanks and pumps, to all major automakers, including GM, Ford, Toyota and Volkswagen, according to its website.

Evonik has begun repairs at the Marl factory, which the company aims to rebuild “before winter,” Ruben Thiel, a spokesman for the Essen, Germany-based company, said April 16 in an e-mail.

Other makers of PA-12 are France’s Arkema SA (AKE), Switzerland’s Ems-Chemie Holding AG (EMSN) and Japan’s Ube Industries Ltd. (4208)

To contact the reporters on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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