Japan's Mitsubishi and Asahi Kasei mull cracker ops merger

02 June 2009 03:21  [Source: ICIS news]

SINGAPORE (ICIS news)--Japan’s Mitsubishi Chemical and Asahi Kasei are studying the possibility of “unifying” their  naphtha cracker operations in Mizushima in a move to raise overall competitiveness, the companies said in a joint statement on Tuesday.

"Formulating measures to heighten competitiveness has become an urgent imperative for the Japanese petrochemical industry, particularly since the broad decline in demand,” they said.

In Mizushima, Japan's largest cracker operator Mitsubishi Chemical has a 450,000 tonne/year cracker while Asahi Kasei's subsidiary Sanyo Petrochemicals has a cracker that can produce 470,000 tonnes/year of ethylene and 300,000 tonnes/year of propylene.

The study for possible consolidation would better prepare the companies on how to cope with the anticipated deluge of materials from the Middle East and in other parts of the world, the companies added.

“If as a result of this study an agreement is reached to proceed with such unification, an additional announcement will be made without delay,” the companies said adding that the move was in line with government-subsidised project, Research Association of Refinery Integration for Group-Operation (RING).

Both companies have made announcements that they were considering integrating operations of their crackers in January 2007 but no firm action plan emerged from talks since.

If the study showed combining production would optimise operations, a joint venture (JV) companies would be formed to operate the "unified" naphtha cracker in Mizushima, the companies said.

“The optimization of naphtha cracker facilities will be effected within three years. The specifics of any consolidation of facilities are undecided at this time. [The] study will proceed in consideration of relationships with the customers of the two parties,” the companies said.

“Derivatives from the products of naphtha cracking are excluded from the scope of the present study. Each party will independently determine its own optimum production balance,” they added.

Mitsubishi also operates two other naphtha cracker facilities at Kashima in the Ibaraki prefecture with a total nameplate capacity of 851,000 tonnes/year.

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By: Bohan Loh
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