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  • fearingsf fearingsf Nov 30, 2012 7:49 PM Flag

    Carbon-fiber plant spends $5M to upgrade

    Sacramento Business Journal

    To increase market share, a local manufacturer of carbon fiber is spending about $5 million to upgrade a production line at its plant in south Sacramento.

    The upgrade will enable Grafil Inc., California’s only carbon-fiber manufacturing plant, to produce more higher-performance carbon fiber used in pressure tanks. Grafil upgraded its other production line in 2006.

    Between 10 percent and 20 percent of Grafil’s revenue stems from pressure tanks that hold gases or liquids, including those used by buses powered by compressed natural gas. Company executives said they would like to capture more of that business, particularly as the price of natural gas drops and the U.S. Post Office, UPS and others roll out more natural gas trucks in their delivery fleets.

    “CNG tank makers need a lot of carbon fiber,” said Masayoshi “Matt” Ozeki, president of Sacramento-based Grafil, a subsidiary of Mitsubishi Rayon Co. Ltd. of Tokyo.

    Within a few years, Grafil hopes to install a third carbon-fiber production line, Ozeki said, adding that it would bring another 30 to 50 jobs.

    Grafil has 115 employees at its 60,000-square-foot Sacramento plant.

    Carbon fiber produced in Sacramento is used to make wind-turbine blades, robot arms, golf clubs and racing shells.

    Most of Grafil’s revenue is driven by industrial uses, such as rollers, pipes or oil risers that connect drilling rigs and underwater wellheads, and tanks that store natural gas on bus rooftops.

    The plant has the capacity to produce about 2,000 metric tons per year of the material, which is lighter and stronger than steel. Executives see big potential in high-volume applications in the wind power and automotive industries that they hope will boost production.

    Some market forecasts indicate “dramatic growth,” or an increase to more than 100,000 metric tons consumed worldwide, by about 2017, said Anthony Roberts, founder of AJR Consulting in Lake Elsinore and a consultant for the carbon fiber industry. Consumption is now at 50,000 metric tons worldwide, Roberts said, adding that the growth is being driven by demand from the automotive and wind power industries.

    In 2006, three Japanese companies, including Mitsubishi Rayon, accounted for 75 percent of the world market share for the carbon filament. Today, there are closer to a dozen companies making carbon fiber, Roberts said.

    While Grafil’s competitors supply The Boeing Co.’s 787 Dreamliner and the Airbus A350 XWB, the Sacramento company — and the industry in general — also will benefit if those projects succeed, said Donald Carter, Grafil’s chief financial officer.

    Betting on increased demand, Grafil sought and won approval from its parent company to upgrade the production line. Grafil expects to receive equipment from Tokyo as early as next month. It will take another two months of construction to get the upgraded system in place, Ozeki said.

    Meanwhile Grafil, like others in the industry, is still recovering from a tough 2009. Grafil started to recover in mid-2010.

    “We’re working our way back to pre-2009 (revenue levels),” Carter said.

    While he declined to disclose the company’s revenue, Grafil reported annual revenue of nearly $100 million in 2006. Carter said it’s “in that range” now.