Japan: Sumitomo and Zeon Combine S-SBR Production Joint Venture in Tire Feedstock
Sumitomo Chemical announced that its Board of Directors has resolved to enter into an agreement with Zeon Corporation for the establishment of a joint-venture regarding the integration of their Solution Styrene Butadiene Rubber businesses.
Tokyo/Japan — Sumitomo Chemical’s S-SBR is used as a feedstock for fuel-efficient tires. The company is witnessing a rising demand for fuel-efficient tires and keener competition in the marketplace with many of the manufacturers expanding production capacities.
Sumitomo Chemical and Zeon have been looking into various opportunities of co-operation, including developing new products to better meet customers' needs by bringing their technologies together, increasing cost-competitiveness further, forming a new joint venture capable of strengthening the business through an ensured stable supply of products, or transferring their S-SBR business operations, including those of their respective affiliates, to a newly formed joint venture. The two companies have recently agreed that certain synergistic benefits should accrue from integrating their businesses.
As set forth in the Joint Venture Agreement, Zeon will establish a new wholly owned subsidiary called ZS Elastomer (“ZSE”). Sumitomo Chemical and Zeon will then succeed the rights and obligations of the sales and R&D functions of each company’s respective S-SBR business to ZSE.