Japan's Zeon to Expand Display Film Output to Meet OLED Demand

(Bloomberg) -- Zeon Corp., a Japanese resin, rubber and latex supplier, is adding a new production line to boost output of films used for flat-panel OLED displays, President Kuniaki Tanaka said.

Demand for large-screen televisions using organic light-emitting diodes is climbing as prices decline, he said in an interview. The Tokyo-based company is planning to spend several tens of billions of yen to add 10 percent to capacity within the next few years.

A key product by the company, ZeonorFilm, is used for smartphone and tablet displays because of its durability, transparency and lighter weight, making it an attractive alternative to glass. Zeon’s stock has more than doubled in the past five years on booming demand for smartphones. Revenue is on track to rise 11 percent in the current fiscal year through March, according to the average of analysts’ forecasts compiled by Bloomberg.

“When people are able to buy 50-inch OLED televisions for 100,000-plus yen ($888), then demand will expand rapidly,” Tanaka said. “The number of people switching to OLED from LCD will climb.”

Zeon has been steadily increasing film output, and recently added a sixth production line at a factory in Toyama, boosting annual production capacity to 119 million meters. Operating income for Zeon’s specialty materials segment is forecast to rise 45 percent to 14.3 billion yen in the current fiscal year.

To contact the reporter on this story: Hideki Sagiike in Tokyo at hsagiike@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Kazu Hirano at khirano1@bloomberg.net, Reed Stevenson

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