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Japanese Petrochemicals Crisis

Big in Japan? Plant Closures threaten Petrochemical Industry

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A Bitter Pill to Swallow

Now, Asahi Kasei, a major chemical and petrochemical company in the country, decides to pull the plug: The firm wants to shut down a 150,000 tons/year operation in Kawasaki and reasign some further 100,000 tons AN Capacity in Mizushima to other products. The Kawasaki site is the smallest AN facility in the Asahi Kasei Group, resulting in relatively high fixed costs. Further, the aging plant, that has been operational since 1964, is facing some serious maintenance works in the near future.

Meanwhile, at Mizushima, two heavyweights of Japanese petrochemical industry join forces to stop turn the tide for the declining site: Asahi Kasei and Mitsubishi Chemical plan to unite their Naphtha cracker activities into a single business. These plans include focusing production on Mitsubishi’s cracker facilities followed by an idling and ultimately disposal of the Asahi sites until 2016.

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Could a co-operation like this become a model for future decisions in Japan’s petrochemical industry? Some seem to think so: Steam cracker operators Mitsui and Idemitsu are already thinking about integrating their operations in Chiba near Tokyo.

Cooperations the Only Way?

The branch, it seems, is running out of time: Already in 2012, Exxon Mobil, one of the biggest oil and petrochemical companies bid farewell to Japan and sold its Japanese production and sales operations. This is an especially bitter pill since Exxon is currently investing heavily in Singapore, a market that looks more promising to Big Oil it seems.

Even Japan’s Chemical Industry Association JPCA calls upon companies to join forces with downstream and customer branches such as the automotive, electronics, eco-products and healthcare sectors, which are traditionally strong in Japan. “Chemical companies and downstream industries need to integrate more the technologies, markets and products in order to generate new markets,” JPCA speakers explained.

* The author is a PROCESS Editor. E-mail contact: dominik.stephan@vogel.de

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