Japan’s chemical players to integrate general-purpose resin biz

Mitsui Chemicals CI

Three major Japanese chemical companies have agreed to merge their general-purpose resin operations, a move seen as an effort to boost competitiveness while South Korea’s chemical industry struggles against low-cost Chinese imports.

According to Nikkei on Wednesday, Mitsui Chemicals, Idemitsu Kosan, and Sumitomo Chemical reached a basic agreement to integrate their resin businesses. Sumitomo’s unit will be merged into Prime Polymer, a joint venture currently owned by Mitsui (65 percent) and Idemitsu (35 percent). After the integration, the ownership stakes will shift to Mitsui at 52 percent, Idemitsu at 28 percent, and Sumitomo at 20 percent.

The integration, scheduled for April next year, will consolidate production, sales, and R&D functions in Japan. The combined operation will control about 30 percent of domestic output, with total sales reaching 387.3 billion yen ($2.79 billion) for fiscal 2024. Polyolefins, which include polyethylene used for plastic bags and polypropylene used in auto parts, are widely used in everyday products.

Nikkei said the merger is expected to accelerate restructuring in the petrochemical sector, with efficiency gains in technology development boosting competitiveness across the broader oil industry.

Japan’s petrochemical sector has already seen moves in this direction. Mitsui Chemicals spun off its petrochemical business in May, and Asahi Kasei, Mitsui, and Mitsubishi Chemical Group jointly established an LLP to reorganize ethylene production facilities.

(Yonhap)

Meanwhile, Korea’s petrochemical industry, where consolidation of naphtha cracking centers is under discussion, is working with the government to refine restructuring plans. The Ministry of Trade, Industry and Energy recently held talks with Ulsan-based companies to review progress and address difficulties in the process.