“Taiyo Nippon Sanso will invest in the Taiwanese PSA manufacturer Benson Industrial Gases Technology (BIG, headquartered in Taipei, capitalized at 11.5 billion yen) which has a factory in Suzhou, China.

It will also underwrite some of the capital increase by third party allotment implemented by BIG. Taiyo Nippon Sanso will acquire 30% of BIG stock. The stock is set to be transferred in November.

Taiyo Nippon Sanso has been engaged in developing its PSA gas generator business primarily in Japan during the past 30 years. Expanding its business overseas, primarily in Asia has become an urgent issue for further development of its PSA business. The company therefore signed an agreement with BIG regarding the commissioning of manufacturing with them. As of last summer BIG has been marketing nitrogen PSA under the Taiyo Nippon Sanso brand name in Asia. Installation is handled by the BIG plant in Suzhou. This investment contract is an extension of that relationship.

According to Masanobu Narita, manager of the machinery and equipment business of Taiyo Nippon Sanso, this investment will involve expansion into Asia and securing a sales route. He stated, “It’s important in the sense that we’ll be able to procure sorbent material produced in China.”

CMS made in China uses phenol resin which is higher priced than palm husks. They use scrap water absorbent sponge called floral foam which has as its strong point that it can be commercialized at an extremely low price. Even in terms of improving quality, “It goes a long way.” BIG procures CMS from a materials producer located in Anhui Province and Taiyo Nippon Sanso too will be able to get hold of the CMS raw material through this route.

The nitrogen PSA of Taiyo Nippon Sanso uses CMS from Japanese producers as well as that which it produces in house. The product produced in China will be added to these, as the raw material for its own CMS, making it a rather rare global PSA producer having 3 types of CMS in its product line. In terms of business it should wield considerable flexibility regarding specification and price. The PSA which the company will be marketing in Asia will see expansion of sales primarily with CMS produced in China. In the Japanese market 3 types of CMS will be sold to comply with the wishes of its customers.

With this investment in BIG, Taiyo Nippon Sanso anticipates that sales of its PSA business, including maintenance, will be 2.5 billion yen in 2016, about twice as it is now. As Narita put it, “We’re gradually creating a setup which will enable us to reach our goal. We’ll be vigorously pursuing our business, centering on our expansion in Asia.””