Tokyo-headquarted UBE Corporation has said it will spend significantly more and push back the launch of its planned battery materials plant in the United States, citing soaring construction costs and supply delays.

 

The Japanese chemicals group announced that the capital investment for its dimethyl carbonate (DMC) and ethyl methyl carbonate (EMC) facility in Louisiana will rise to about $700 million, up from the approximately $500 million originally disclosed in 2024. The plant’s start-up has also been delayed from November 2026 to the first quarter of fiscal 2027.

 

The project was first announced on February 29, 2024, under the title “UBE Announces Investment in DMC/EMC Plant Construction in the U.S. and Capital Increase for a Subsidiary.”

 

The company attributed the higher price tag to escalating costs across the board. According to UBE, “The increase in capital investment is mainly attributable to higher material prices, rising construction costs in the U.S., and additional U.S. tariff measures.”

 

Construction has also been slowed by supply chain problems. UBE said “The change in the scheduled start of operations is due to delays in the delivery of certain equipment, which have affected the construction schedule.”

 

To support the larger project, the company will inject additional funds into its U.S. unit, UBE C1 Chemicals America, Inc.. UBE plans to provide an additional $200 million in fiscal 2026 to the subsidiary responsible for building and operating the facility. Once completed, the subsidiary’s capital is expected to double from $200 million to $400 million.

 

DMC and EMC are key ingredients used to make electrolytes for lithium-ion batteries, which power electric vehicles and energy storage systems.

 

While EV adoption in the United States has grown more slowly than expected, UBE said demand for battery materials tied to other sectors remains strong. The company pointed to rising use of lithium-ion batteries in energy storage systems, particularly to support backup power at AI data centers.

 

Despite the cost increase and delay, UBE said its long-term outlook for the battery materials market remains intact and the changes are not expected to significantly affect the business’s sales plan.