Japanese chemical sector profits escalate as the economy booms

31-May-05

Leading Japanese chemical majors like Shin-Etsu, Mitsui Chemicals and Asahi Kasei have almost doubled their profits as compared to the previous fiscal. Rising profits can be attributed to two factors - the global petrochemical uptrend - spiking demand for raw materials, which in turn has been fuelled by a booming global growth and continuous reforms in the Japanese petrochem sector for the past five years. Sumitomo Chemicals has recorded its highest ever, net earnings at US$601 million, triggered by rising demand from the electronic sector. Demand for electronic materials like polarizing films for flat-panel displays posted a phenomenal 41.5% rise, spiking a rise in demand for Sumitomo's basic chemicals like caprolactam, styrene and propylene oxide Mitsubishi Chemical too overcame its previously registered heavy losses backed by rising demand and hit the profit trail by 2.5%. Yet another petrochemicals major Mitsui Chemicals, recorded an 80% growth in overall business, with the core sector accounting for 60% of the company's sales. Shin-Etsu, the decade-wise profit earning company, saw a 24.5% rise in earnings, mainly due to higher profits from major business segments propelled by a booming economy. Asahi Kasei, a leading synthetic fiber maker, also manufacturing basic industrial chemicals and electronic materials, has almost doubled its earnings due to rising demand from USA and China. Fibres and yarn makers Teijin and Toray also announced 1% and 2.6% profit margins for the year 2004.