Mitsubishi Chemical Eyeing Petrochemical Biz Spin-Off

Tokyo, May 25 (Jiji Press)--Japan's Mitsubishi Chemical Group Corp. said Monday that subsidiary Mitsubishi Chemical Corp. is considering spinning off its petrochemical business, possibly in fiscal 2027, for potential consolidation with industry peers.

The move comes as Japanese makers of basic chemicals, such as ethylene, face a worsening business environment due partly to overproduction by Chinese makers.

The companies are struggling to maintain their competitiveness as the operating rate for production facilities for such basic chemicals, used as materials for plastics and synthetic fibers, has fallen in recent years also reflecting slumping demand at home.

In addition, the ongoing Middle East crisis has highlighted the need to ensure stable supplies. "It's essential to reinforce the business foundation of our petrochemical business," a public relations official at Mitsubishi Chemical Group said.

Last year, Mitsui Chemicals Inc. announced it plans to spin off its petrochemical business around fiscal 2027 and make the spin-off the nucleus of consolidation with other companies.

[Copyright The Jiji Press, Ltd.]