Japan Chemical Trading Blog
Mitsui Chemicals of Japan and SKC of Korea to Consolidate Polyurethane Material Businesses
On December 22, Mitsui Chemicals, Inc. (MCI) announced the signing of a joint venture agreement to consolidate the polyurethane material businesses of MCI and SKC Co., Ltd. (SKC).
The consolidated company is going to be established in South Korea around April 2015, expecting the sales of USD1,5 billion per year.
Polyurethane is a collective name for polymers that have a urethane bond (-NH・CO・O-) and the major applications of polyurethane foam include automobile seats and heat insulating materials.
The size of the global market is around 10 trillion Japanese Yen (aprox. USD ten billion) per year.
MCI has already decided to stop polyurethane material production at its TDI plant in Kashima and MDI plant in Omuta in 2016 due to declining earnings under the depressed market conditions caused by large-scale addition of facilities in China.
MCI and SKC intend to maximize the synergy effects by establishing a joint venture in South Korea with an ownership of 50% each.
I hope that MCI will be able to improve its financial standing through a series of structural reforms.