The build is said to be aimed at capturing the growing demand for the feed additive within the Asian poultry sector.
Japan’s JGC Corporation reported last week that it has been awarded the contract for the construction of the methionine plant.
The new facility will be sited alongside an existing Sumitomo Chemical factory, and is scheduled to be completed in the middle of 2018.
Tokyo headquartered, Sumitomo Chemical, said the facility will have output of around 100,000 metric tons per year.
Distribution deal
The producer also announced it has set up a joint venture deal with distributor, Itochu, to market the methionine product when the facility is on stream.
Itochu, it said, has a strong relationship with the CP Group, one of Asia’s largest purchasers of methionine with feed factories in such countries as Thailand and China.
Sumitomo Chemical said the deal should ensure quick sales when the plant is operational; Itochu, in turn, will benefit from a reliable supply of methionine, it added.
Furthermore, with that distribution company paying for a percentage of the product upfront, Sumitomo said the agreement ensures it has improved cash flow allowing it to secure an earlier return on investment (ROI) from the plant build.
Financial performance
Meanwhile, the Tokyo based group reported sales for the half-year ended September 30 of 900.5 billion (bn) yen (USD$7.9bn), a decrease of 175.4 bn yen compared with the same period in its last fiscal year.
The group posted operating income of 47.3 bn yen, ordinary income of 50.6 bn yen and net income attributable to owners of the parent of 19.2 bn yen, all representing year-on-year decreases.
The company noted then that said sales of methionine had dropped during the period due to lower market prices.
Evonik expansion in Singapore
German chemical company, Evonik, is also ramping up production of its amino acid product, DL-methionine, in Asia.
In October, it reported that construction had got underway of its second plant in Singapore for the production of that feed additives. That complex, when completed, will have an annual production capacity of 150,000 metric tons. It is expected to become operational in 2019.