TOKYO -(Dow Jones)- Toray Industries Inc. (3402.TO) said Monday it will spend Y5 billion to build a carbon fiber production facility in South Korea to meet growing demand in China and other Asian nations.

Japan's largest synthetic fiber maker by sales said it will construct a new facility at its existing plant in Gumi, South Korea, which will have production capacity of 2,200 metric tons per year. The plant is scheduled to start operations from January 2013.

Earlier this month, Toray decided to resume the construction of a 1,000-ton per year carbon fiber facility at its plant in western Japan after suspending the project in 2009 following the global economic crisis.

Currently, Toray has a combined annual carbon fiber production capacity of 17,900 tons at its facilities in Japan, the U.S. and Europe.

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.

Copyright © 2011 Dow Jones Newswires