25 February 2014 09:55 [Source: ICIS news]
(re-leads to financial impact, adds details throughout)
SINGAPORE (ICIS)--Asahi Kasei said on Tuesday it expects to incur yen (Y) 18bn in extraordinary loss in the fourth quarter from measures being undertaken to streamline its Japan operations.
Measures involve closure of some of its plants in Mizushima and Kawasaki in the coming years, the Japanese producer said.
Consequently, the company revised down its net profit forecast for the fiscal year ending March 2014 to Y12bn from the previous guidance of Y65bn, Asahi Kasei said in a statement.
The company has agreed to consolidate its cracker operations in Mizushima with Mitsubishi Chemical by April 2016, while some of its downstream plants at the site and in Kawasaki will be permanently shut one by one over the next two years.
The shutdowns will start with Asahi Kasei’s 150,000 tone/year acrylonitrile (ACN) plant in Kawasaki in August this year.
In Mizushima, the company’s 24,000 tonne/year styrene butadiene (SB) latex plant and its 65,000 tonne/year acrylonitrile-butadiene-styrene (ABS) plant will be closed in December 2015.
Its 37,000 tonne/year epoxy resins plant at the site will cease operations in May 2015, while its 320,000 tonne/year styrene monomer (SM) plant will stop production in March 2016, the company said.
“The operating climate in the domestic Japanese petrochemical market is expected to be increasingly challenging, with contracting demand and increasingly severe competition from low-priced imports,” Asahi Kasei said.
Asahi Kasei and Mitsubishi Chemical began studying the unification of their crackers – each with a 500,000 tonne/year capacity – in August last year.
They have agreed to pursue the unification, which will entail the closure of one of the crackers, while the capacity of the remaining cracker will be increased by 70,000 tonnes/year.
The measures are expected to “establish the optimum production configuration from feedstock to derivatives in balance with domestic demand in order to heighten competitiveness and ensure a stable earnings base” for Asahi Kasei, the company said.
($1 = Y102.45)
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