Mitsubishi Chemical plans to invest $915 million in U.S. plant

Japan's Mitsubishi Chemical Corp plans to invest more than 100 billion yen ($915 million) to build a factory in the U.
S.
state of Louisiana to produce a key ingredient in plastic
.

This investment will boost the production of methyl methacrylate (MMA) in the United States
.
This raw material is used to make acrylic plastic used in a wide range of products, including auto parts and home coatings
.

The move comes as global manufacturers face the prospect of giving more concessions to U.
S.
-made products, and the Biden administration has proposed tightening so-called "Buy American" rules on government procurement
.

The plant, which will start operations in 2025, aims to reach an annual output of 350,000 tonnes
.
This will make it Mitsubishi Chemical's largest MMA plant in the world, equivalent to about 10% of total global demand
.

The company holds about 40% of the global market for the material
.
The new plant will increase Mitsubishi Chemical's overall supply capacity by 20 percent
.

The company has purchased the site and is working on further details
.
Its overall investment may increase to about 150 billion yen
.

Mitsubishi Chemical plans to introduce its proprietary manufacturing process at the new plant, which is used at the Saudi Arabian plant
.
Its manufacturing cost is believed to be less than half that of its Chinese counterparts using general manufacturing methods
.
Mitsubishi Chemical was able to reduce production costs by using ethylene extracted from U.
S.
shale gas
.

The Biden administration's proposed changes to the "Buy American" rule would make it harder for products purchased with taxpayer dollars to pass the "Made in America" ​​test
.
The minimum level of domestic material content will first rise from 55% to 60%, eventually reaching 75% in 2029
.

The Biden administration signed a $1.
9 trillion stimulus package in March and made progress on a $2 trillion infrastructure package
.
Expectations of economic growth are pushing some Japanese companies to increase their U.
S.
capacity, including Nippon Steel and Shin-Etsu Chemical, one of the world's largest polyvinyl chloride makers
.

The U.
S.
economy is projected to grow by 6.
9% in 2021, according to the OECD, slower than China's 8.
5% expansion but faster than Japan's 2.
6%, the euro zone's 4.
3% and the world's 5.
8%
.

Foreign direct investment by Japanese companies reached nearly 5.
9 trillion yen in the January-March period, up 5.
4 percent from a year ago, according to Japan's finance ministry
.
Investment in the U.
S.
rose by about 40 percent to nearly 2.
5 trillion yen
.
Even compared to the same quarter in the year before the coronavirus pandemic, the figure was a big leap, an increase of about 40%
.

Meanwhile, Japanese investment in China fell 45% to 184 billion yen in the three months to March
.