Mitsubishi Chemical eyes overseas expansions

JAPAN - Mitsubishi Chemical Corporation, one of the largest chemical companies in Japan, is considering overseas expansion through partnerships with leading companies abroad, as the company suffered income losses in the first half of fiscal year 2011 brought about by the lingering effects of the Great East Japan Earthquake that hit the country in March.

In its consolidated financial report for the first half of fiscal year 2011, which covers the months of April to September, the company posted a modest net sales increase of ¥5.5 billion (US$71.4 million), or 0.4%,  to ¥1,570.20 billion (US$20.38 billion) compared to the same period of fiscal year 2010.

However, the company's operating income, ordinary income, and net income all decreased. Operating income dropped by ¥15.7 billion (US$204.19 million) or 14.1% to ¥95.7 billion (US$1.25 billion) compared to the same period in 2010, while ordinary income decreased by 12.7% to ¥92.9 billion (US$1.209 billion) compared to the same period last year. Net income decreased by 14.7% to ¥37.5 billion (US$488.05 million) compared to the same period in 2010.

Despite the negative results, Mitsubishi Chemical Holdings is confident about its future. According to president and CEO Yoshimitsu Kobayashi, the company aims to "expand operations through partnerships with overseas leading companies" to help rebuild Japan's supply chain.

The company's major expansion initiatives during the first half of fiscal 2011 include a joint venture with China's Sinopec to open new plants for bisphenol A (BPA) and polycarbonate (PC) resins in Beijing – all of which are expected to be completed in the fourth quarter of 2011.

In April this year, Mitsubishi Chemical Corporation established a 50:50 joint venture with PTT Public Company Limited in Thailand to accelerate its global expansion of biodegradable plastic GS Pla.

Mitsubishi Chemical and  PTT have jointly invested US$232 million (7 billion baht) in a bio-plastic venture that will start production by late 2014. The construction of the plant will start next year.

The following month, the Japanese chemicals company also announced an increase in PVC compound production capacity in Thailand from 15,000 tons per year to 19,000 tons per year.

In addition Mitsubishi Chemical sealed a business partnership deal in April with BioAmber Inc and Mitsui & Co Ltd – the latter having an interest in BioAmber. The partnership will focus on supplying biomass succinic acid, conducting R&D, and production technologies for the biodegradable GS Pla.

In China, Mitsubishi Chemical Corporation has established a new production facility for olefin thermoplastic elastomer and adhesive polymer with a capacity of 4, 500 tons per year. The company also plans to expand a production facility for olefin thermoplastic elastomer and adhesive polymer in North America with a capacity increase of 1,900 tons per year to its current capacity of 9,200 tons per year.