Mitsubishi plans to restructure: to exit Polystyrene and PVC businesses

13-Apr-09

Hit by deteriorating demand amid overcapacity, Mitsubishi Chemical Corp plans to exit the polystyrene and PVC businesses, possibly triggering reorganization within the industry. The company is likely to hive off its 27.5% stake in PS Japan Corp, Japan's biggest supplier of polystyrene, to other shareholders in the company, Asahi Kasei Corp and Idemitsu Kosan Co, for 2-3 bln yen (US$20-30 mln). For its PVC business, Mitsubishi Chemical is considering liquidating V-Tech Corp, its venture with Toagosei Co, which owns a 14.9%. It’s PVC and PS operations generate annual sales of about 100 bln yen, amounting to a little over 3% of Mitsubishi Chemical Holdings' group revenue. The company plans to shift to advanced materials in a bid to escape the volatility of commodity resin market that face additional competition from China and other parts of Asia. Mitsubishi is also considering overhaul of its ethylene-related operations and may withdraw from some businesses.