JSP Corporation

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JSP Corporation

4-2-3 Marunouchi, Chiyoda-ku
Tokyo
100-0005
Japan
Telephone: (+81) 3 6212 6300
Fax: (+81) 3 6212 6302
Web site: http://www.co-jsp.co.jp

Public Company
Incorporated: 1962 as Nihon (Japan) Styrene Paper
Employees: 747
Sales: ¥77,724 million ($735.3 million) (2004)
Stock Exchanges: Tokyo
Ticker Symbol: JSP
NAIC: 326150 Urethane and Other Foam Product (Except Polystyrene) Manufacturing

JSP Corporation is the world's largest producer of expanded polypropylene plastics (EPP), backed by its proprietary beads foaming and extrusion foaming processes. The company, which developed the first EPPs in the 1970s, markets these materials under the P-Block, ARPOR (in North America), and EPPOR brand names, as well as its Super Blow line of hybrid foam technology products. The company has also been a pioneer in the development of biodegradable plastics, such as its Green Block packaging products. These products are said to break down completely into carbon dioxide and water when in contact with soil. JSP subgroups its product lines into four primary categories: Sheets, Beads, Boards, and others. Applications using JSP's products include styrene paper; P-Pearl polypropylene foam sheeting used as a food packaging material; Acryace sheeting used in the construction of rear-projection television screens; Miramat polyethylene foam sheets, used as a cushioning material; packaging materials under the Caplon, P-Board, P-Mat, Miranet, and other brands; P-EPP (porous expanded polypropylene), used for acoustical paneling, among other applications; P-Block and ARPOR, which are used in the production of automobile bumper systems; expanded polyethylene, providing molded protective packaging; and cross-linked expanded polyethylene, used for a variety of cushioning applications, from sports equipment to flooring under-liners. JSP Corporation is an internationally operating business, with production plants in the United States, Mexico, France, Germany, Italy, Korea, Taiwan, Singapore, and China, in addition to 11 production facilities in Japan. The company also operates a number of research and development facilities and in the mid-2000s has been focusing its research and development efforts on creating new product applications for its core technologies. Japan remains the group's largest market, with nearly 74 percent of sales of ¥77,724 million ($735.3 million) in 2004. Mitsubishi Chemical is JSP's largest shareholder, following the merger of Mitsubishi Chemical Foam Plastic into JSP in 2003. JSP is listed on the Tokyo Stock Exchange and led by chairman Masaaki Harada and president Rokurou Inoue.

Polystyrene Specialist in the 1960s

JSP Corporation's roots trace back to the 1950s with the founding of Japan Gas Chemical in 1951 and Nihon Plastic and Chemical Co in 1957. Those two companies merged together to form Nihon (or Japan) Gas Chemical Co in 1961. One result of the merger was the creation of a dedicated unit for the production of foamed polystyrene, and especially polystyrene "paper," that is polystyrene formed into sheets. The new subsidiary was named Nihon Styrene Paper (JSP) and launched its operations at a production plant attached to Nihon Gas Chemical's newly built Hiratsuka Research Laboratory, which opened in 1962.

The creation of plastics-based packaging materials, especially polystyrene paper, played an important role in the development of the packaging industry. The new materials were lightweight (since they were composed 95 percent of air), capable of being produced as food-grade materials, were waterproof, provided superior cushioning, and were easily molded to a variety of shapes. Yet the production of styrene paper and foamed polystyrene in general required the mastery of sophisticated technology.

This technology advantage helped Nihon Styrene Paper quickly to assert itself as a leading producer of styrene paper in Japan, particularly in the second half of the 1960s. The company's emphasis on research and development paid off in 1967, when the company launched a new generation of styrene-based packaging material. The new proprietary sheeting was marketed under the name Miramat, becoming JSP's first branded product.

JSP's growth coincided with the rise of Japan as a leading global industrial center, a top exporter of electronic and other goods to world markets. Indeed, JSP's foamed polystyrene-based packaging materials played an important role in enabling Japan to develop its export market, providing a cheaper, lighter, and more efficient packing material. The company's foamed packaging materials were also adopted by a variety of industries, including Japan's large fishing industry. The company's polystyrene containers quickly replaced cardboard as a means of transporting fish to shore and across the country.

In 1971, Japan Gas Chemical merged with another fast-growing chemicals company, Mitsubishi Edogawa Chemcial Co., forming Mitsubishi Gas Chemical Company. The new entity then became the parent of Nihon Styrene Paper, which later was renamed as JSP Corporation. The Edogawa company was one of the country's oldest chemicals producers, established as a Mitsubishi partnership in 1918.

Expanding Production in the 1970s

As part of one of Japan's leading chemical groups, JSP now had the resources to expand its production in the 1970s. The company opened a new plant in Kanuma in 1971. This was followed by the opening of the company's Kansai Plant in 1975 and by the construction of the Kyushu Plant in 1978.

JSP continued developing new products in the 1970s. In 1977, the company launched its Miraboard line of styrene paper created specifically for the food industry. The new type of packaging material could be formed into a variety of shapes and had the important quality of being heat resistant. In this way, the company backed the growth of a new segment of processed and ready-to-eat foods. The company's products were also in demand by the fast food and restaurant industries.

Yet JSP had also begun to imagine other uses for its polysty-rene beyond the packaging industry. In 1978, the company launched a new product, called Mirafoam, providing paneling and insulation products for the construction industry. By then, environmental concerns about the use of polystyrene foam had led JSP to form a new company in 1974 for the production of foam recycling machinery.

JSP also sought to exploit its technological advance in the international market at the end of the 1970s. This led the company to acquire a stake in France's Douff SA in 1978. The company then transferred the technology and equipment needed to produce Miramat packaging materials for the French and European markets. JSP later acquired control of the French company, which was renamed Sealed Air Packaging SA.

Japan remained JSP's primary market, however, and in 1980 the company opened a new plant in Hokkaido in order to accommodate rising demand for its polystyrene products. The company's research and development efforts paid off again in 1982 when JSP launched a new type of foamed polystyrene, dubbed P-Block. The new material was developed specifically for Japan's fast-growing automotive industry, providing the core for a new generation of lightweight, plastic bumper systems. The rapid adoption of the new materials by Japanese automakers helped them gain a competitive edge as they made a massive entry into the United States and other auto markets.

International Growth in the 1980s and 1990s

The new material provided the company with an entry into the U.S. market in the 1980s, as American automakers responded to the rising sales of Japanese cars in the United States with smaller, more fuel-efficient automobile models. In 1985, JSP launched a U.S. subsidiary, JSP America Inc., in order to make investments in that market. This effort led the company to form a manufacturing joint venture with Arco in order to produce P-Block for the North American market. The joint-venture was named Arco/JSP Co. By 1986, JSP had launched a wholly owned U.S. manufacturing subsidiary, J&V Foam Products.

JSP also prepared a range of new products for the end of the decade. In 1988, the company achieved a first breakthrough with the launch of its Mirawoody Green packaging technology. The new product provided a more environmentally friendly packaging material than its standard polystyrene products.

JSP's research and development efforts continued to facilitate the company's growth through the end of the decade. In 1989, JSP launched production of two new material brands: L-Block and Caplon. Also in that year, the company formally changed its name to JSP Corporation. This move came ahead of the company's public listing on the Tokyo Stock Exchange's Second Section, in 1990.

The name change came ahead of a new and more aggressive drive to expand the company's operations internationally. In 1991, the company expanded its Arco/JSP joint-venture to Europe, opening a new subsidiary in Belgium. That year, the also company set up a joint venture in Korea, called KOSPA, in order to produce polystyrene foam products for the Korean automotive industry. The KOSPA joint venture was established as a vertically integrated operation, producing the raw materials needed to make polypropylene foam as well as the final foam products themselves.

Company Perspectives:

Reinforcing Our Foundation Through the Merger with MFP. To prosper in international competition and maintain our edge amid ongoing globalization of markets, we must accelerate the pace of technological development, R&D, and product application development. We also need to recover our investments more quickly. We have combined our research programs with MFP's research programs in the July 2003 merger, a move that is expected to deliver synergistic benefits. Moreover, the integration of MFP's upstream technologies with JSP's downstream strengths will further expedite the commercialization process.

JSP entered Taiwan in 1992, setting up the joint-venture Taiwan JSP Chemical Co Ltd. The following year, the company bought out Arco and renamed the Arco/JSP operation as JSP International. Now directly controlled by JSP Corporation, JSP International launched an aggressive drive to establish itself as a global supplier of foamed bumper systems to the worldwide automotive industry. The company began expanding its production capacity, adding two new plants in the United States and a third, under subsidiary JSP Foam Products, in Singapore in 1995. The following year, the company's JSP America Inc. subsidiary took over its J&V Foam Products subsidiary in the United States.

In the United States, the company's fortunes rose after the passage of legislation establishing stricter automotive safety standards, including the use of impact-absorbent padding on the interior side of vehicle doors starting in 1996. Automakers were also increasingly adopting foam-core bumper systems, and by the late 1990s more than half of all U.S. cars featured this type of system. JSP itself claimed a 60 percent share of that product category.

In addition to its success in the United States, JSP had become a major supplier to the European automotive industry, notably the safety-conscious Volvo Corporation. The company boosted its European manufacturing operations when it established JSP International Manufacturing in France. In 1997, JSP also set up a manufacturing subsidiary in Toluca, Mexico.

New Product Applications and Expansion into the 2000s

In the 1990s, JSP launched several new products and brands, while extending its technology at the same time. At the beginning of the decade, for example, the company debuted its system for creating non-freon foamed plastic. The new system helped eliminate the highly polluting freon from the plastics production process.

The company also rolled out new packaging grade materials, such as the launch of Mirafit, a housing material, in 1993, and P-Pearl, developed for the food packaging industry and launched in 1994. The following year, the company released another new packaging material, P-Board. Then, in 1998, the company achieved a significant breakthrough with the launch of its Green Block packaging material. The environmentally friendly product claimed to be 100 percent biodegradable, breaking down into carbon dioxide and water in the soil. In 2000, the company debuted its next generation of packaging products, Mirafreeze.

JSP entered Germany in 2001, buying up a manufacturer of molding materials and equipment to establish JSP International Gmbh & Co. The following year, JSP moved to mainland China, setting up JSP Plastics (Zuxi) Co. That subsidiary was followed by a second Chinese operation, JSP International Trading (Shanghai) Co. in 2004. By then, the company had also added a new manufacturing facility in Tullahoma, Tennessee, in 2002.

The following year, JSP confirmed its position as the world's leading manufacturer of foamed plastic products when it agreed to merge with Mitsubishi Chemical Foam Plastic Corporation (MFP). The addition of MFP complemented JSP's own production with a specialty in the production of expanded polystyrene. With the addition of MFP's sales of ¥13 billion per year, JSP Corporation's total sales topped ¥77 billion ($750 million) by the end of 2004.

Difficult market conditions, including the soaring price of crude oil as a result of the invasion of Iraq by the United States, forced JSP to cut back its expandable polystyrene production by as much as 20 percent starting in mid-2004. Yet the company continued to seek to expand its other operations, especially on an international level. In January 2005, JSP announced its intention to build a new plant in the Czech Republic in order to produce expanded polypropylene foam in order to meet rising demand for EPP-based bumper cores and automotive interior shock absorption systems. The new plant, with an initial capacity of 7,000 tons per year, was expected to be operational in 2006 and to double its capacity by 2014. With this expansion, JSP Corporation demonstrated its intention to remain the world's leading producer of polypropylene and polystyrene foam products well into the 21st century.

Key Dates:

1962:: Nihon (or Japan) Styrene Paper Company is established as a result of a merger between Japan Gas Chemical Co and Nihon Plastic and Chemical Co. to produce polystyrene paper products for the packaging industry.
1967:: Miramat packaging material for food and other industries is launched.
1978:: The company expands internationally for the first time with an investment in Douff SA, in France, which begins producing JSP's Miramat packaging material.
1982:: P-Block foam, used as the core for automotive bumper systems, is launched.
1985:: The company forms a joint venture with Arco to produce P-Block for the North American market.
1989:: The company's name is changed to JSP Corporation.
1990:: The company lists on the Tokyo Stock Exchange's Second Section.
1993:: The company acquires control of Arco/JSP and changes its name to JSP International, which becomes spearhead for the group's international expansion.
1998:: Green Block biodegradable packaging material is introduced.
2003:: JSP absorbs Mitsubishi Chemical Foam Plastic Corporation, consolidating its position as a world leader in its market.

Principal Subsidiaries

Japan Xanpak Corporation; KP Corporation; Japan Repromachine Industries Co., Ltd.; Seihoku Packaging Company; Japan Acryace Corporation; JSP Molding Corporation; MIRAX Corporation; Kansai Plast Corporation; Yukasansho Kenzai Co., Ltd.; Hokuryou Eps Co., Ltd.; Honsyu Yuka Co., Ltd.; JSP International Group Ltd. (Unitee States); JSP International LLC. (United States); JSP Mold, LLC. (United States); JSP Licenses, Inc. (United States); JSP International Specialty Foams LLC. (United States); JSP Automotive Interiors LLC (United States); JSP International de Mexico, S.A. de C.V. (Mexico); JSP International SARL (France); JSP International GmbH & Co. KG (Germany); JSP International GmbH (Ger-many); JSP International SRL (Italy); Sealed Air Packaging S.A.S. (France); KOSPA Corporation (Korea); Korea Special Products Co., Ltd. (Korea); Taiwan JSP Chemical Co., Ltd. (Taiwan); JSP Foam Products, Pte. Ltd. (Singapore); JSP Foam Products Hong Kong Limited (China); JSP Plastics (Wuxi) Co. Ltd. (China); JSP International Trading (Shanghai) Co., Ltd. (China).

Principal Competitors

KGM Industries Ghana Ltd.; Abplast Products PLC; Dow Chemical Co; E A Juffali and Brothers; Tekni-Plex Inc; Continental AG; HeidelbergCement AG; Nuqul Group of Cos.; Phoenix Brushware; Stirol Joint Stock Co.; Kaneka Corporation; Nitto Denko Corporation.