Fire at Mitsubishi’s ethylene plant to shutter unit for 3-4 months

24-Dec-07

Last week’s fire at Japan's largest ethylene plant, operated by a unit of Mitsubishi Chemical Holdings, is to shut the core facilities for at least three to four months. It is still unclear which facilities are to be shut at the Kashima plant, near Tokyo. The closure, caused by a fire that killed four persons, will make it imminent for Mitsubishi to make a few revisions in its current business plan. Damages by the fire are being assessed to determine the exact period of the shut down. Suspension of production at the 516,000 tpa ethylene plant (almost 12% Japan's ethylene capacity) is estimated to result in a loss of 100 mln yen a day. The plant's No. 1 unit, which can produce 410,000 tpa ethylene is operating normally. However, this situation will make it imminent for Mitsubishi Chemical Holdings to ask competitors for feedstock supply. The company may also find itself in a situation where it will be forced to delay or resell cargoes of its primary feedstock naphtha.