24 February 1997 00:00 [Source: ACN]
MITSUI Chemicals will seek acquisitions in speciality chemicals following its formation through the merger of Mitsui Toatsu and Mitsui Petrochemicals in October, a Mitsui Toatsu source told ACN.
'The new company aims to have total sales of Yen1200bn (US$9.6bn) by 2007, evenly divided between commodity chemicals and general plastics, on the one hand, and speciality chemicals, on the other,' the source said.
'However, given that sales of the former now stand at around Yen450bn, and sales of the latter at less than Yen300bn, we will somehow have to more than double our sales of speciality chemicals, while increasing our sales of commodity products by a much smaller percentage,' the source added.
He said this would probably be achieved through developing new products and acquiring existing speciality chemical companies. 'However, a strategic plan of how to go about this will only be made after the merger takes place,' he said.
Meanwhile, Mitsui Toatsu is continuing with restructuring ahead of the merger. Its latest announcement is its intention to link in the near future its PP operations with Grand Polymer, a joint venture between Mitsui Petrochemical and Ube Industries. This will make Grand Polymer the country's second-largest PP producer. The company will also merge its three processing plastics units into a single subsidiary.
Mitsui Toatsu and Mitsui Petrochemical are currently waiting for a ruling from the country's Fair Trade Commission (FTC) on the future of their phenol operations. Their combined share of the Japanese phenol market stands at over 50%.
'We expect the FTC to okay the merger, but the new company might have to consider selling off part of its phenol business,' said the source. The FTC is likely to hand down its verdict before the merger takes place, possibly during this summer.
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