Japan's Chemical Profits Surge

Major Japanese chemical firms reported much better profits in their most recent fiscal year, which ended on March 31, than in the year-ago period. The March 11 earthquake did disrupt production significantly at many companies, but it affected only the last three weeks of a generally strong year.

Japan’s largest chemical company, Mitsubishi Chemical, reported a record net profit of more than $1 billion, or six-and-a-half times more than the previous year. For most of the year, Mitsubishi enjoyed favorable conditions in Japan thanks to rising consumer and corporate spending. The firm said conditions became “severe” after the earthquake because it had to stop operations in Kashima, where it operates its largest plants.

Sumitomo Chemical, Japan’s second-largest chemical producer, raised its net profit by 66%. It credited strong demand for electronic materials and higher margins for industrial chemicals. Sumitomo noted that the start-up of its Rabigh joint venture in Saudi Arabia in April 2009 boosted its sales of petrochemicals.

Crediting buoyant economic conditions in Asia, Japan’s most profitable chemical company, Shin-Etsu Chemical, boosted its net profit by almost 20% to $1.2 billion in the latest fiscal year. Shin-Etsu noted that the semiconductor business was quite strong in the first half of the year. The company is still struggling to restart PVC production at a site near Tokyo and silicon wafer output at a plant closer to the earthquake’s epicenter.

JSR, a maker of synthetic rubber and electronic materials, increased its net earnings by 87%. Company President Nobu Koshiba tells C&EN that his firm was able to maintain or improve its rubber margins. In the electronics business, he notes, the market for semiconductor materials was generally healthy. But demand for liquid-crystal display materials slackened in Japan after the end of a stimulus program.