UPDATE 1-Konica Minolta to build new LCD film plant-sources
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TOKYO, July 2 (Reuters) - Japan's Konica Minolta Holdings Inc (4902.T) will invest about 18 billion yen ($170 million) to build a new production facility for high-tech film used to make LCD panels, sources close to the matter said on Wednesday.
The factory will increase the company's production capacity for triacetyl cellulose, or TAC film, by some 20 percent to 270 million square metres a year, the sources said. TAC film protects the polarisation plate used in liquid crystal display (LCD) panels.
Demand for TAC film is growing rapidly as flat TV makers such as Samsung Electronics Co (005930.KS) and Sharp Corp (6753.T) aggressively expand LCD panel production capacity. Konica Minolta competes with Fujifilm Holdings Corp (4901.T) in TAC film.
The plant, the company's seventh devoted to making TAC film, will be located in Kobe, western Japan, with operations expected to begin in late 2009, the sources said.
The news comes after Konica Minolta Senior Executive Officer Shoei Yamana told a Reuters technology summit in May that the company planned to build a new TAC film plant in Japan with an annual output capacity of around 50 million square metres. [ID:nSP138356]
TAC film demand is growing 20-30 percent a year and is expected to nearly triple to 1.6 billion square metres by 2015, according to the Nikkei business daily.
Konica Minolta shares fell 2.5 percent to 1,765 yen by midday, underperforming a 1 percent fall in the Nikkei average .N225. ($1=106.04 yen) (Reporting by Noriyuki Hirata, writing by Sachi Izumi; Editing by Brent Kininmont)
