Boeing’s Carbon Fiber Supply Is Moving Closer to Home

Boeing Factory

Boeing Co. (NYSE:BA) said earlier this week that the decision by Toray Industries out of Japan to install a $1 billion carbon fiber production facility in South Carolina was a “proactive” move to support the production of Boeing’s 787 at the aircraft maker’s South Carolina facility after Toray purchased 400 acres in Spartanburg County for a factory that will create 500 new jobs.

Carbon fiber is a sort of fabric, which when infused with epoxy resin, takes on a hard and durable yet lightweight nature. It is used to make the body and wings of the Dreamliner, and has several automotive applications as well. Toray’s placement of the new facility will bring the supply closer to the demand.

“Toray is an important supplier on the 787 program, and we support its proactive efforts in regard to the program’s planned rates of more than 10 (airplanes) a month,” Boeing spokesperson Candy Eslinger said earlier this week.

Toray is also expanding its plant in Tacoma, Washington, in response to Boeing’s move to increase the production of 787s it builds to 12 a month in 2016, the company said last month.

“South Carolina offers Toray Industries an ideal location for our next North American manufacturing facility,” Akihiro Nikkaku, president of Toray Industries, said in a statement. “Here we will have proximity to major customers, both in the U.S. and in Latin American markets.”

Boeing 787

Boeing is currently holding orders for about 1,000 787s set to be delivered to 60 different clients, and the plant in South Carolina makes all left and mid-body fuselage sections for the jet. While some are finished in-state, most are sent to Boeing’s plant in Everett, Washington.

The production of the 787 is an integral part of Boeing’s financial performance this year. By the middle of 2014, Everett should be producing seven jets per month, while South Carolina will contribute three. Boeing is hoping to have 12 787s a month by mid-2016, and 14 a month by the end of the decade.

South Carolina is coming off a hiring spree to help clear the backlog of 787s, but that process is expected to be spread over several months.

More From Wall St. Cheat Sheet: