Japan's Efforts to Integrate Businesses to Improve Competitiveness

After several years of brewing negotiations, the Japanese chemical industry's merger of petrochemical businesses to enhance their competitiveness has entered a substantive implementation phase, and has intensified.

Mitsui Chemicals and Teijin Chemical have formed a joint venture called MCT PET Resins to integrate their PET bottle grade resin business in Japan. The joint venture will formally operate from April 1 this year. For the first time, Mitsui Chemicals and Teijin Chemical announced the merger of the PET resin business in August 2010. Mitsui Chemicals holds 80% of the equity in the MCT PET resin joint venture, and Teijin Chemical holds the remaining 20%. Both parties plan to reduce their production costs by consolidating their businesses so that they can compete with imported products from other Asian countries. MCT PET Resins will optimize its business from the supply chain to all aspects of production, enhance operational competitiveness, improve quality and cost competitiveness, and better serve customers. The joint venture company expects annual sales income of 25 billion yen.

Nishi Nippon Ethylene Co., Ltd., officially operating on April 1, 2011, was jointly established by Japan's Mitsubishi Chemical and Asahi Kasei Corporation. In fact, as early as May 2010, the two companies announced that they will establish a limited liability company with equal capital contribution from both parties to integrate and manage the naphtha cracking business of their respective water islands in Japan. The joint venture company, headquartered in Tokyo, will reduce the naphtha cracking capacity of Shuidao until 2012, as it is expected that domestic ethylene demand will decrease by 30%. Mitsubishi Chemical and Asahi Kasei each have a naphtha cracker at Shuishui Island. Each unit has an annual capacity of 500,000 tons of ethylene. A spokesperson for Mitsubishi Chemical said that their goal is to eventually shut down one of the devices, and decide which device to shut down later.


On October 1st, 2010, Mitsui Chemicals and Idemitsu Kosan Co., Ltd. split their operations in Chiba, Japan, into a joint venture company called Chiba Chemical Manufacturing Co. (CCM), including Mitsui Chemicals' local company's 553,000 tons. / Ethylene plant and Idemitsu Kosan Co. in the local 374,000 tons / year ethylene plant. According to the two companies, only through this type of cooperation can the competitiveness be enhanced and thus not eliminated by the market. Both parties also plan to expand the business combination approach to special chemicals, polymers and chemical intermediates.

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