Japan’s Mitsui Chemicals sees Y6bn loss from Iwakuni-Ohtake blast

14 June 2012 09:30  [Source: ICIS news]

SINGAPORE (ICIS)--Mitsui Chemicals expects to incur yen (Y) 6bn ($76m) in overall losses from a blast that shut all facilities at its Iwakuni-Ohtake Works site on 22 April, the Japanese producer said on Thursday.

An estimated Y3bn will be shaved off the company’s total operating profit for the current fiscal year ending March 2013, taking into account the suspension of production at the site and the consequent decline in sales, the producer said in a statement.

Expenses for recompense, dismantling and restoration, as well as fixed costs related to the suspension of plants following the accident, and insurance income will also amount to Y3bn, it said.

“Currently, plants in the Iwakuni area of the Iwakuni-Ohtake Works, with exception of the resorcinol plant and some other plants, are conducting safety inspections and routine annual maintenance, the company said.

The blast occurred at the resorcinol facility at the site, causing damage to nearby facilities.

“Operations are scheduled to resume at most plants when safety and conditions of plants have been confirmed with approval from authorities in July,” the company said.

Mitsui Chemicals said that its net profit in the current fiscal year is expected to hit Y8bn ($101m) – a sharp reversal of the Y1bn loss incurred in the same period a year earlier – in spite of the Iwakuni-Ohtake losses.

Operating income from its petrochemical business would still show a 70.5% year-on-year increase to Y15bn even after deducting losses from the 22 April accident, with sales clocking a 2.31% increase at Y470bn, it said.

The company’s overall net sales are expected to grow by 4.13% year on year to Y1,510bn, while its operating income is forecast to post a 48.1% growth to Y32bn, it said.

($1 = Y79.3)

By: Nurluqman Suratman

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