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May 31, 2019

Volume 7 Issue 4

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KH Neochem Plant to Open in 2020

KH Neochem’s new refrigeration lubricant additive plant, expected to open early next year in Mie prefecture, western Japan, will increase the company’s production capacity by 50 percent to meet Asia’s growing demand, the company said.

The Tokyo Stock Exchange-listed company forecasts that demand for additives used in refrigeration lubricants will grow by a compound annual rate of 8 percent in China and by 9 percent for the rest of Asia – excluding Japan – from 2018 to 2025, according to the company’s presentation materials for shareholders.

China’s share of new hydrofluorocarbons refrigerant will increase from 74 percent to 99 percent from 2018 to 2025, while in the rest of Asia, excluding Japan, it will increase from 70 percent to 90 percent, the company said. HFCs have lower greenhouse gas effects than older refrigerants like chlorofluorocarbons and hydrochlorofluorocarbons.

“The growth of the Chinese market is slowing down a little, but demand will continue to grow. Conversion to the new type of refrigerant for air conditioners will continue in Asian countries,” said the company.

“[We will] expand sales thanks to the new plant for refrigeration lubricant raw materials and launch production of new raw materials for refrigeration lubricants for next generation HFC,” it added.

The company declined to disclose production capacity, but a company spokesman said the new ¥7.5 billion (U.S. $67 million) plant in Yokkaichi city will begin production in early 2020.The company first announced the project in early 2018, but didn’t disclose the amount of increase at that time.

The company’s isononanoic acid – which it produces along with 2-ethylhexanoic acid, alcohols and esters from its proprietary oxo reactions – is used to formulate refrigeration compressor lubricants for the circulation of refrigerant in air conditioners.

For financial year 2018, sales of performance chemicals, including refrigeration lubricant additives, increased 6 percent to ¥39.4 billion. The company expects sales for the financial year 2019 to increase 5 percent to ¥41.3 billion.

The company increased production capacity at its performance chemical plant – which also produces refrigerant lubricant additives – in Ichihara City, Chiba, eastern Japan, by 30 percent in March last year. KH Neochem claims to be the sole manufacturer in Japan of isononanoic acid, a raw material for lubricants used in non-CFC air conditioners.

Air conditioner coil

Photo: Nor Gal/Shutterstock

A closeup of the indoor unit coil of an air conditioner unit. KH Neochem’s isononanoic acid is used to formulate refrigeration compressor lubricants for the circulation of refrigerant in air conditioners.