Japanese Cracker To Close

Mitsubishi Chemical will permanently shut an ethylene cracker and a benzene plant at its Kashima complex in Japan as part of a cost reduction effort. The cracker to be closed, Kashima No. 1 Ethylene Plant, started up in 1971 and has an annual capacity of 390,000 metric tons. The benzene plant can produce 90,000 metric tons per year. Mitsubishi says it will partially compensate for the ethylene shortfall by expanding capacity at its No. 2 Ethylene Plant by 50,000 metric tons. The overall effort will cost Mitsubishi $123 million, but it expects to reap $50 million in annual savings. Japan, one of the highest-cost countries in which to make petrochemicals, produced 6.7 million metric tons of ethylene last year, down from a peak of 7.7 million metric tons in 2007. Responding to rising petrochemical output in the Middle East and China, Mitsubishi has closed a number of Japanese petrochemical plants in recent years, including ones making styrene, terephthalic acid, and vinyl chloride. It is also considering combining its cracker operations with those of Asahi Kasei.