Japan’s Mitsui Chemicals restructuring continues amid Asia oversupply

SINGAPORE (ICIS)–Japan’s Mitsui Chemicals is considering downsizing its domestic phenols business, as well as optimize domestic cracker and polyolefin operations, as part of its business restructuring, to transition into a specialty chemicals producer by the end of the decade.

The company is “mulling domestic downsizing” of its phenol/acetone plants, citing a decision by Japanese producer Idemitsu Kosan to withdraw from the bisphenol A (BPA) business by October 2024 due to oversupply.

Phenol and acetone are feedstocks for the production of BPA.

Mitsui Chemicals operates a plant in Chiba which can produce 114,000 tonnes/year of acetone and 190,000 tonnes/year of phenol; and a unit in Sakai with a 120,000 tonne/year acetone and 200,000 tonne/year phenol capacities, according to the ICIS Supply & Demand Database.

The company is stepping up efforts towards becoming a global specialty chemical firm by 2030, it said in a presentation to investors on 28 November.

” As well as stepping up the pace of business portfolio transformation, we will further aim to further reduce volatility by accelerating the second phase of [the] Basic & Green Materials business restructuring,” the company said in the presentation slides.

“This will include an optimised production setup at our crackers, among other efforts.”

Mitsui Chemicals’ two crackers have a combined ethylene capacity of around 1.1m tonnes/year.

Mitsui Chemicals on 21 November said that intends to close its polyethylene terephthalate (PET) plant within the Iwakuni-Ohtake Works in October 2024 after it determined that “that it is no longer feasible to secure a profit from domestic PET resin production”.

At the same site, the company’s 400,000 tonne/year purified terephthalic acid (PTA) plant was shut permanently this year, as it had announced in March 2022.

For its polyolefins business, Mitsui Chemicals said that it will be mulling optimisation options via “multi-company collaborations” following the move by its subsidiary Prime Polymers to shut a 110,000 tonne/year polypropylene (PP) line at its Chiba site in March this year.

Prime Polymers’ new 200,000 tonne/year PP plant – which is part of Mitsui Chemicals’ plan to restructure its existing production system under and “scrap-and-build-approach” – is expected to start up in 2024.

CARBON-NEUTRAL CRACKERS
Mitsui Chemicals is planning to come up with an “ideal state” plan for its crackers by the end of its 2025 fiscal year (year to March 2026), which could include capacity optimisation in line with demand fundamentals.

The company operates naphtha-based crackers in Chiba and Sakai, Osaka.

The Sakai cracker can produce 500,000 tonnes/year of ethylene (C2), while its Chiba unit has 612,000 tonnes/year of C2 capacity.

The company, along with Maruzen Petrochemical, Toyo Engineering and Sojitz Machinery launched in 2022 a pilot project aimed at switching feedstock at crackers from conventional methane-based fuel to one in which ammonia is the principal component.

In July 2023, Mitsui Chemical had announced its intention to become the first company in Japan to start producing and marketing chemical products and plastics derived from chemical recycling based on the mass balance approach.

The mass balance in petrochemicals involves calculating the input, output, and accumulation of raw materials and products in a petrochemical process to ensure efficiency and to minimize waste.

Pyrolysis oil made from plastic waste will be supplied by Japan’s CFP Corp and will be used by Mitsui Chemicals as feedstock for the cracker at the Osaka Works in January to March 2025.

In the fiscal first half to September 2023, Mitsui Chemicals’ net profit declined by 53.4% year on year to Japanese yen (Y) 20.7bn ($141m), with sales down by 13.4% at Y823.7bn.

Focus article by Nurluqman Suratman

($1 = Y147.1)

Thumbnail image: At a container port in Tokyo, Japan, 19 October 2023. (By KIMIMASA MAYAMA/EPA-EFE/Shutterstock)