Toray Industries Inc. (3402.TO) has started production of carbon fiber for use in Boeing Co.'s (BA) new 787 Dreamliner jetliners under its 16-year, $6 billion supply contract after repeated delays in the jet's development.

Toray, a major carbon fiber maker, said Friday it began production at a plant in Ishikawa Prefecture of "prepreg," material combining carbon fiber with epoxy resins, used in the 787's wing and tail units.

The production facilities, which cost Y7 billion to build, have annual production capacity of 5.8 million square meters, the company said.

-By Yoshio Takahashi, Dow Jones Newswires; 813-6895-7561; yoshio.takahashi@dowjones.com