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REUTERS/Miho Uranaka Shunichi Kito, president of Japan’s second-biggest refinery Idemitsu Kosan, speaks about its strategy including energy transition and decarbonisation measures in an interview with Reuters, at the company’s headquarters in Tokyo, Japan December 14, 2022.
Reuters
17:26 JST, March 27, 2024
TOKYO (Reuters) – Japanese oil refiner Idemitsu Kosan and Mitsui Chemicals plan to consolidate their ethylene complexes in Chiba near Tokyo, they said on Wednesday, as the industry is under pressure from competition with China.
The companies would consider closing Idemitsu’s Chiba ethylene facility to consolidate production at Mitsui Chemical’s site in the 2027 fiscal year. The new business would be operated by a limited liability partnership or a joint venture.
“Japanese ethylene complexes continue to be forced to operate at a low rate due to both the opening of large new additional petrochemical complexes, mainly in China, and the diminishing domestic ethylene demand,” the statement said.
The final decision on the proposed consolidation, which should also accelerate the push towards carbon neutrality in the petrochemical sector, is yet to be made, the companies said.
On Monday, Shunichi Kito, president of the Petroleum Association of Japan and Idemitsu Kosan’s president, said that the petrochemical sector will need to consolidate to withstand competition from emerging petrochemical complexes in China and the Middle East amid an already tough earnings environment.
Ethylene is a petrochemical that is used to produce plastics such as polyethylene for items such as plastic bags and containers.
