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Japanese Petrochemicals

Mitsubishi Chemical and Asahi Kasei mull merger of petrochemical operations

by Jean-François Tremblay
June 8, 2009 | A version of this story appeared in Volume 87, Issue 23

As part of an effort to improve the profitability of their struggling petrochemical businesses, Mitsubishi Chemical and Asahi Kasei will study whether to merge their olefins facilities at the Mizushima complex in southern Japan. Both companies' petrochemical businesses lost money in the fiscal year that ended on March 31.

At Mizushima, each company operates a 450,000-metric-ton-per-year ethylene cracker and a series of downstream facilities. A Mitsubishi spokesman tells C&EN that no decision has been made concerning the closure of either one of the crackers, as has been speculated in the Japanese business media. Japan's total ethylene capacity is about 7.5 million metric tons.

Ryota Hamamoto, a senior executive adviser at the consulting firm Accenture, in Tokyo, says the Mizushima site clearly has too much ethylene capacity. He adds that the pending merger of the refiners Shin Nikko and Shin Nihon Sekiyu, raw material suppliers to Asahi and Mitsubishi, respectively, likely "further motivated" the decision to consolidate at the site.

In related moves, Mitsubishi announced that it will withdraw from making styrene and caprolactam, a nylon raw material. The decision will entail the closure in Japan of a 370,000-metric-ton styrene facility and a 60,000-metric-ton caprolactam plant. Earlier this year, the company said it would stop producing purified terephthalic acid in Japan.

Mitsubishi has also agreed to swap its nylon business in exchange for DSM's polycarbonate business. Both businesses enjoy annual sales of about $130 million. Hamamoto says the restructuring at Mitsubishi, Japan's largest chemical maker, is perhaps overdue but is still "better late than never."


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