Mitsui Chemicals to shut down PU and phenol production facilities

12-Feb-14

In a bid to bring down the losses due to its underperforming business of polyurethane and phenol, Japanese chemical major Mitsui Chemicals Inc has announced a major restructuring plan, which involves closing down of some production facilities, as per Business Standard. As a part of the plan for polyurethane business, all plants at the Kashima Works (Japan) and diphenylmethane diisocyanate (MDI) plants (having production capacity of 60,000 tpa) at the Omuta Works (Japan) of Mitsui Chemicals are scheduled to be terminated and disposed of by December 31, 2016. The Kashima Works will close down by December 31, 2016 due to difficulties of ensuring the competitiveness of specialty isocyanates and organic acid, resulting from the termination of the tolylene diisocyanate (TDI) plants. Post shutdown, production of specialty isocyanates will be shifted to the Omuta Works. Mitsui said that business profitability of TDI and MDI dropped due to market oversupply caused by rapid expansion of production in Asia, especially in China. Interestingly, in 2013, Mitsui Chemicals, along another Japanese firm Itoh Oil Chemical, entered into a joint venture with India's Jayant Agro-Organics for the establishment of a company based in Gujarat, to produce bio-polyol, a raw material for polyurethane foams. Mitsui expects the plant to start up in January 2015. For phenol business, the phenol plant at the Chiba Phenol Co Ltd – a joint venture between Mitsui Chemicals and Idemitsu Kosan – will be closed. According to the company statement, sales slumps in domestic phenol and deterioration in export profitability due to oversupply from new facilities in Asia compelled the two companies (Mitsui and Idemitsu) to reduce production and realign phenol operations. The closure of Chiba Phenol Co plant is scheduled for September 30, 2014. Following the closure, Mitsui Chemicals will meet Idemitsu's phenol needs by providing in-house produced phenol. The two companies will take actions to intensify cost competitiveness in their respective phenol chains. Additionally, as part of the domestic phenol business restructuring, Mitsui Chemicals has decided to terminate its Bisphenol A (BPA) plants at its Ichihara Works (Japan).