Mitsubishi Chemical, Asahi Kasei to shutter an ethylene plant in Okayama

06-Aug-13

Mitsubishi Chemical Holdings Corp. and Asahi Kasei Corp. have consented to shut down one of their two ethylene facilities at a complex in Okayama Prefecture in spring 2016. This decision has been triggered by shrinking domestic demand and growing output in the Middle East and China. The suspension is expected to cut fixed costs by ¥10 billion annually. “We concluded it is necessary to eliminate overcapacity to reinforce Japan’s petrochemical business,” Yuji Kobayashi, president of Asahi Kasei Chemicals Corp., the Asahi Kasei unit for ethylene operations, told a press conference. The two partners will decide the details of the suspension plan by spring 2014, including which petrochemical products will be subject to lower production and how to deal with affected workers. Japan’s total ethylene production capacity will remain above 6 million tons annually, well above estimated domestic demand of 5 million tons. At present, total capacity is at 7.21 million tons.