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Home | News |Mitsui to close all plants at Kashima; MDI plant at Omuta
Mitsui to close all plants at Kashima; MDI plant at Omuta
Updated: 2014-02-07 09:42 Source: PUWORLD share:

Mitsui Chemicals today announced a major restructuring of its operations as a result of the volatility in the polyurethane and phenol markets. Mitsui's board of directors has approved a restructuring plan, which will result in the closure of several production facilities in Japan.

Mitsui says that it will close all production plants at the company's manufacturing complex at Kashima, Japan, as well as a 60,000-m.t./year methylene di- para -phenylene isocyanate (MDI) plant at the company’s site at Omuta in Fukuoka Prefecture, Japan, by 31 December 2016. Mitsui's Kashima site produces 117,000 m.t./year of toluene diisocyanate (TDI); 32,000 m.t./year of maleic anhydride; 15,000 m.t./year of fumaric acid; 500 m.t./year of xylylene diisocyanate (XDI); and 900 m.t./year of hexamethylene diisocyanate (HDI). The profitability of the TDI and MDI businesses decreased due to oversupply in the market caused by additional capacity coming online in Asia, especially China, Mitsui says.

Mitsui also plans to close its 90,000-m.t./year bisphenol A (BPA) plant at Ichihara in Chiba Prefecture, Japan, by 31 March 2014. The profitability of the BPA business struggled due to oversupply in the market, and a fall in demand for the product in Japan, Mitsui says.

Separately, Mitsui and Idemitsu Kosan announced today that they have decided to close their Chiba Phenol joint venture plant, located in the Idemitsu production complex at Ichihara, by September 2014. Chiba Phenol was established in 1990 and commercial operations at the jv began in 1993. Mitsui holds a 55% stake in Chiba Phenol and Idemitsu holds the remaining 45%. Chiba Phenol manufactures 250,000 m.t./year of phenol, and 80,000 m.t./year of acetone. A fall in phenol sales in Japan and deterioration in the profitability of exports as a result of oversupply from new facilities in Asia forced the two companies to take the decision, Mitsui and Idemitsu say. Following the closure of the plant, Mitsui will meet Idemitsu's phenol needs by providing phenol produced by Mitsui.

Mitsui will soon have phenol production capacity in China. Shanghai Sinopec Mitsui Chemicals, a jv between Mitsui and Sinopec, is building plants with capacity for 332,500 m.t./year of cumene; 250,000 m.t./year of phenol; and 150,000 m.t./year of acetone at the Shanghai Chemical Industry Park, at Caojing in China. The plants are expected to become operational in May 2014.

As a result of the restructuring plan, an extraordinary loss of ¥20.6 billion ($203 million) was recorded as ‘business restructure improvement expenses’ in the company’s third quarter ended 31 December 2013, Mitsui says.

Mitsui today announced its financial results for the fiscal first nine months, ended 31 December. Reflecting this extraordinary loss, Mitsui reports a net loss of ¥18.5 billion for the nine month period, compared with a net loss of ¥9.7 billion in the same period of the previous fiscal year. Nine-month sales increased 10%, to ¥1.10 trillion. Operating profits for the nine-month period increased more than sixfold compared with the year-ago period, to ¥15.1 billion, because of better trading conditions in the company's petrochemicals business and higher sales volume in the functional chemicals and functional polymeric materials businesses, Mitsui says.

With the planned closure of the Kashima site, XDI and HDI production will be moved to Omuta, Mitsui says. Mitsui announced today that it will construct the world's first large-scale production plant for XDI at its Omuta site. The 5,000-m.t./year XDI plant is expected to begin production in October 2015.

 

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