Basic Materials Business Sector
We are committed to building a framework that will serve as a cornerstone business while supporting the Mitsui Chemicals Group as a whole. To this end, we will put in place a stable earnings foundation based on the competitive advantage our domestic facilities give us and our proven ability to capture Asian market share in value-added fields.
Basic Materials Mission
Over the past several years, the Basic Materials Business Sector has undertaken a major restructuring of its activities, including substantial cutbacks in production capacity.
Moreover, we are working diligently to improve the operational stability and profitability of ethylene, a basic raw material for petrochemical products. Specifically, we are expanding sales of EVOLUE™, a core product in our high-value-added polymer lineup.
Despite the cloud of uncertainty that continues to hover over petrochemicals supply and demand, we adhere strictly to a policy of rationalization, make every effort to add value to our derivatives lineup, and maintain our high utilization rate in line with the growing trend toward local production for local consumption. As a result, we are putting in place a stable earnings platform that is resilient to changes in the external environment, including shifts in market conditions and the balance between supply and demand.
Market Analysis and Strategic Issues
Opportunities & Risks
- Infusion of U.S. shale oil- and Chinese coal chemical-derived production
- Bulk and commodity product price volatility in Asia
- Influx of imported products and worsening export terms due to the strong yen
- Surging crude oil prices
- Shrinking domestic demand and slowing Chinese economic growth
- Shift in the market toward high-performance packaging
- Rising need for eco-friendly products
- Domestic production structure based naphtha cracker facilities located in two sites (one east, one west)
- Metallocene and other polyolefin catalytic technologies
- Robustly cost competitive polyurethane system business with a growing global facility network underpinned by the establishment of Mitsui Chemicals & SKC Polyurethanes Inc.
- An expanding lineup of unique, differentiated products
- Expanding value-added fields using polyolefin catalytic technologies
- Accelerating global expansion of new system houses by leveraging synergies with Mitsui Chemicals & SKC Polyurethanes Inc.
- Establishing a stable earnings structure by business restructuring
Strategic Product Lineups
Ethylene, Propylene, High density polyethylene, Metallocene linear low density polyethylene (EVOLUE™), Linear low density polyethylene, Polypropylene, Olefin polymerization catalysts
Phenol, Bisphenol A, Acetone, Isopropyl alcohol, Methyl isobutyl ketone, Purified terephthalic acid, PET resin, Ethylene oxide, Ethylene glycol, Hydroquinone, Meta/Para-cresol, Ammonia, Urea, Melamine, Semiconductor gas
Polyurethane Raw Materials
TDI (COSMONATE™), MDI (COSMONATE™), PPG (ACTOCOL™, ECONYKOL™)
Departments and Products
- MSD-100（alpha-methylstyrene dimer）
- Crued Acetophenone
- MIBK (methyl isobutyl ketone)
- DIBK (diisobutyl ketone)
- MIBC (methyl isobutyl carbinol)
- Hexylene glycol（HG）
- Isopropyl Alcohol（IPA）
- Bisphenol A
- EPOMIK™（epoxy resin）
- Purified terephthalic acid
- MITSUI PET™ (polyethylene-terephthalate)
- Ethylene oxide
- Ethylene glycol
- HA-EOA (High alcohol ethoxylate)
- Sodium Hydroxide
- Sodium sulphite
- Hydrochloric acid
- Methyl methacrylate (MMA)
- Formic methyl
- bombe ammonia
- Meta / Para-cresol
- Nitrogen trifluoride
- Silicon tetrafluoride
- Boron Nitride Powder
- C5 fraction
- Olefin polymerization catalyst
- Prime Polypro™
- Prime TPO™
Fiscal 2017 Business Overview
Focusing on petrochemicals and basic chemicals, the Group maintained high-capacity operations at its naphtha crackers and other plants due to strong domestic demand while continuing to progress with business structure improvement. Sales of polyethylene and polypropylene remained firm, backed by domestic demand. As for phenols, overseas market conditions were stronger than the previous fiscal year, and efforts to promote structural business reforms are bearing fruit. The Group also worked to ensure greater competitiveness by cutting costs and expanding its lineup of differentiated products.
Increase/Decrease in Operating Income
¥38.9 billion (+¥0.4 billion year on year)
Volume ¥(0.2) billion
- Stable sales of each product
Terms of trade +¥1.9 billion
- Market price, etc.
Costs ¥(1.3) billion
- Scale difference of regular maintenance, etc.
Sales by Product
Sales by Region
Trends in Net Sales and Operating Income
Fiscal 2025 Target
Operating income:¥30.0 billion
The impact of the expansion of facilities for polyethylene and other production derived from shale gas and Chinese coal chemicals is expected to be felt in Asia from mid-2018. Nevertheless, we will look to build a Basic Materials business that has a strong presence in the Asian market by reinforcing our cost competitiveness and shifting to high-value-added products.
- We aim to further increase earnings by expanding our lineup of highly profitable differentiated products and derivatives.
- We plan to further enhance our competitiveness by establishing a local production for local consumption system and an optimal production system for bulk and commodity products.
- We will actively pursue capital investment aimed at further enhancing our competitiveness.
Fiscal 2018 Plan
In petrochemicals, operating rates are expected to remain at high levels for naphtha cracker and derivatives facilities on the back of firm domestic demand. With regard to our overseas bases, sales of EVOLUE™ have been sound since the start of commercial operations at a facility in Singapore in fiscal 2016. Looking ahead, operating rates are anticipated to increase.
In the basic chemicals and polyurethanes, we expect to post stable earnings. This largely reflects successful efforts to put in place an optimal production system and a structure that is resilient to changes in market conditions.
TOPICS - The Tireless Efforts at Our Works
Responding to concerns about the import of U.S. shale-derived petrochemical products and other developments in the petrochemicals market, Mitsui Chemicals worked hard to reinforce the earnings base of its naphtha crackers by drafting and executing profit enhancement measures focused mainly on supply chain revisions and strategies for leveraging opportunities and corporate strengths. In addition, we achieved stable operations, cost reductions, and technological innovation of our works.
1. Operating naphtha crackers at full capacity
Our capacity utilization rates exceed the national average and significantly contribute to our stable earnings.
2. Dramatically reducing costs and CO2 emissions
We realized steep cost reductions through our diligent rationalization efforts.
3. Using revolutionary energy-saving technologies
We possess the world’s most advanced energy-saving technologies.
We were included in the first round of the Top Ten Energy Efficiency Best Practices List compiled by the International Partnership for Energy Efficiency Cooperation (IPEEC). The case was titled, “Large-scale Energy Conservation at the Ethylene Plant by using LNG Cold Energy.”
Introduction to Blue Value™ and Rose Value™ Products
Exhaust gas (NOx) reduction agent
- Reduce CO2
- Harmonize with nature
Reduce NOx emissions
Contribute to fuel conservation
*AdBlue™ is a trademark of the VDA (Verband der Automobilindustrie)
Seat cushion material
- Reduce CO2
- Protect resources
Reduce fossil fuel resource consumption through use of bio-based raw materials