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The new supply contract, which will extend
Toray's current one with Boeing for more than 10 years, sent
shares in the Japanese company surging 4 percent to a seven-year
high.
The contract will help cement the key role Japanese companies
already play in Boeing's commercial aircraft business. Boeing
estimates that around 22,000 engineers in Japan, or 40 percent
of the nation's aerospace workforce, already work on its jets.
Boeing has already said that Japanese companies, including
Mitsubishi Heavy Industries <7011.T> and Kawasaki Heavy
Industries <7012.T>, will build one-fifth of the 777X.
Toray is spending 100 billion yen ($865 million) on a carbon
fiber plant in South Carolina. It said on Monday that it expects
60 billion yen of that investment to be completed in the next
three years.
After difficulties managing its extended 787 global supply
chain, which caused delays in the program, Boeing decided to
take a more conventional approach to building the 777X. The
plane will have a metal fuselage, unlike the all-carbon-fiber
Dreamliner.
The first 777X is due to be delivered in 2020 and the plane has
so far garnered some 300 orders and commitments. It is expected
to be 12 percent more fuel efficient than the current 777, which
was introduced in 1995 and has become one of Boeing's most
popular and reliable wide-body planes.
Toray's shares ended at 842.1 yen. At one point, the stock rose
as high as 857.4 yen, the highest level since January 2008.
($1 = 115.7 Japanese yen)
(Editing by Edwina Gibbs, Miral Fahmy and Muralikumar
Anantharaman)
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