JAPANESE RESTRUCTURING Mitsubishi Chemical teams up with China’s Sinopec

Abstract

Facing dismal prospects for its petrochemical business in Japan, Mitsubishi Chemical has reached an agreement in principle to team up with China’s oil and petrochemical giant, Sinopec. The two companies have released few details concerning their new partnership. But they envisage that it will involve joint research projects, new joint ventures, sharing raw materials and logistics, and exchanging personnel. Mitsubishi says the agreement represents “a new business model” for building a chemical business in Asia. Japan’s petrochemical market has been stagnating for several years, and the global economic crisis has stepped up the pressure on Japanese firms to restructure. In February, Mitsubishi announced that it would stop producing purified terephthalic acid in Japan and move management of the business to Singapore. Mitsubishi also produces this polyester raw material in Indonesia, China, South Korea, and India. Earlier this month, Mitsui Chemicals and Sumitomo Chemical said that they would stop making poly...