02 April 2009 11:44 [Source: ICIS news]
TOKYO (ICIS news)--Japanese chemical producers Mitsui Chemicals and Sumitomo Chemical plan to dissolve their polystyrene (PS) joint venture and exit the PS business because they do not expect decreased demand to recover in the future, the companies said in a joint statement on Thursday.
The two companies said their 50:50 joint venture, Japan Polystyrene (JPS), was scheduled to discontinue operations at both of its ?xml:namespace>
Mitsui Chemicals and Sumitomo Chemical said they had decided to withdraw from the PS business because it would be “extremely difficult” to achieve stable revenues over the mid to long term with the operating environment becoming increasingly constrained.
Domestic demand for PS was decreasing sharply, particularly in areas such as electronics and industrial applications, the companies said.
This was due to the increasing shift of major Japanese PS customers’ production bases to overseas locations as well as high feedstock costs over the past few years, the producers said.
Demand was not expected to recover, they said.
Mitsui Chemicals and Sumitomo Chemical said that JPS planned to continue to sell its inventory in the interim.
As JPS would try to exit the PS business without causing inconvenience to customers, it would request cooperation from other companies in PS industry concerning its customers' product supplies, the two companies said.
Mitsui Chemicals and Sumitomo Chemical established JPS in 1997.
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