Toray Industries Inc. (3402.TO) said Tuesday it has decided to resume construction of carbon fiber-making facilities in Japan, anticipating a recovery in demand for the material used in aircraft and other products.

Japan's largest synthetic fiber maker by sales has suspended construction work to build an additional production line at its Ehime plant in Shikoku island of western Japan, since the spring of 2009 in the wake of global economic turmoil. The new line was initially scheduled to kick off operations in July 2009.

But a quick recovery in demand prompted the decision to resume construction work there. With the amount of outlays estimated as same as the initially planned Y16 billion, the new line is expected to go on stream from September 2012.

The boost will help increase Toray's annual capacity to churn out carbon fiber by 1,000 metric tons to 18,900 tons.

Carbon fiber products are used in a wide range of industrial applications, including aircraft, fuel tanks for compressed natural gas cars, and blades for power-generating windmills. Carbon-fiber reinforced materials weigh about half as much as sheet steel and 30% less than aluminum.

In 2006, Toray signed a 16-year contract worth at least $6 billion to supply carbon fiber materials for use in Boeing Co.'s (BA) new 787 Dreamliner.

-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789; Hiroyuki.Kachi@dowjones.com
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