Mitsui Chemicals Announces Closure of Phenol Plant at Ichihara Works

Mitsui Chemicals, Inc. has announced its decision to close the phenol plant situated at its Ichihara Works no later than fiscal 2026. This strategic move aligns with the overarching goal of Mitsui Chemicals Group’s Basic & Green Materials Business Sector, which encompasses the phenol business, to redefine itself as a sustainable green chemicals entity with a focus on competitive derivatives. As part of this transition, the Group is actively optimizing its production setup at the crackers line to align with demand, ensuring the competitiveness of its derivatives. The impetus for this restructuring initiative dates back to the aftermath of the 2008 global financial crisis, prompting Mitsui Chemicals Group to initiate reforms within its Basic & Green Materials Business Sector. This ongoing effort to recalibrate operations is now entering a second phase of restructuring, which includes the recent announcement of the phenol plant closure.

Presently, Mitsui Chemicals operates phenol production facilities at three locations: Ichihara in Chiba, Takaishi in Osaka, and Shanghai in China. The Ichihara Works saw the inception of phenol production in 1970, marking the genesis of Mitsui Chemicals’ phenol business, which experienced steady growth driven by escalating demand for pivotal derivatives such as bisphenol A and phenolic resin. However, since 2022, the business landscape has witnessed significant challenges, including a downturn in domestic demand and an oversupply resulting from the establishment of new production facilities in China and other Asian regions. In response to these adverse market conditions, Mitsui Chemicals implemented various rationalization measures in a bid to sustain its phenol business. Despite these efforts, it has become evident that maintaining profitability at the Ichihara Works phenol plant is no longer viable. Consequently, an impairment loss on fixed assets related to this business has been recorded as other operating expenses.

While the decision to cease operations at the phenol plant in Ichihara Works is regrettable, Mitsui Chemicals remains committed to ensuring uninterrupted supply to its customers. To achieve this, the company aims to establish a phenol chain characterized by high capital efficiency and stable profitability, thereby safeguarding its market presence and meeting customer demands.

Overview of the phenol plant to be closed

As part of its broader strategic vision outlined in the VISION 2030 Long-Term Business Plan, Mitsui Chemicals is steadfast in its pursuit of portfolio reform to become a global specialty company. This transformation hinges on two key pillars: a high-growth, high-profitability global specialty chemicals business and a sustainable green chemicals business focused on competitive derivatives.

The Basic & Green Materials Business Sector plays a pivotal role in supplying materials to diverse industries that form the backbone of society. Moving forward, this sector will spearhead a transition towards green chemicals by replacing petrochemical raw materials with alternatives such as bio-based hydrocarbons and chemical recycling. These initiatives are poised to catalyze a green shift across vital industries where Japan maintains global competitiveness, including semiconductors, automobiles, and pharmaceuticals, thereby contributing to the creation of a sustainable society.