- The integration targets cost savings of over 8 billion yen annually.
- Sumitomo Chemical will transfer its PP and LLDPE businesses to PRM in a two-phase absorption-type split.
- PRM will be owned by Mitsui (52%), Idemitsu (28%), and Sumitomo Chemical (20%).
- The integration aims to strengthen competitiveness in Japan's PO market.
Business Integration Agreement
Mitsui Chemicals, Idemitsu Kosan, and Sumitomo Chemical have finalized an agreement to integrate Sumitomo Chemical's polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses with Prime Polymer Co., Ltd. (PRM), a joint venture between Mitsui and Idemitsu. This move aims to enhance the competitiveness of the polyolefin (PO) business in Japan.
Market Context
PO accounts for about 50% of Japan's plastic demand, used in sectors like automotive and electronics. Despite past mergers, oversupply remains an issue, and domestic demand is expected to decline due to population and lifestyle changes.
Integration Details
The integration will occur through a two-phase absorption-type split. Sumitomo Chemical will transfer its PP and LLDPE businesses to PRM, acquiring a 20% stake in PRM. Post-integration, PRM will be owned by Mitsui (52%), Idemitsu (28%), and Sumitomo Chemical (20%).
Strategic Goals
The integration aims to optimize the PO production system, targeting annual cost savings of over 8 billion yen. It also seeks to enhance competitiveness against imports and develop environmentally friendly products, contributing to a sustainable green chemical business.
