Asahi Kasei May Seek Ethylene Business Merger With M’Bishi Chemical

By Kyodo News International, Tokyo

Jan. 12–TOKYO — Asahi Kasei Corp. may seek to integrate its ethylene operations with Mitsubishi Chemical Corp.’s in a bid to make the business more efficient, Asahi Kasei President Shiro Hiruta said in a recent interview with Kyodo News.

“If we can do it together, it’s worth doing,” Hiruta said.

An Asahi Kasei group company and Mitsubishi Chemical are operating ethylene businesses at a complex in Kurashiki, Okayama Prefecture.

While pointing out both companies’ ethylene facilities need to be renewed soon, Hiruta said, “We should consider measures to make (the facilities) more efficient.”"There will be a chance to do business together if we can establish a complementary relationship,” he said.

The Asahi Kasei group firm and Mitsubishi Chemical have already been cooperating by providing raw materials and products to each other.

Hiruta said, however, the two have not yet entered into specific negotiations and added they need to consult their respective customers before starting integration talks.

He stressed the need to carefully consider the possible integration of the ethylene business. “If we cannot build complementary relations, the integration will not result in the improvement of the two firms’ corporate value.” Ethylene is a basic material used in petrochemical products such as polyethylene and vinyl chloride resin, both used as food wrapping materials.

Japan’s ethylene industry is facing tough internal competition.

Many ethylene output facilities in Japan are small while rival firms in China and Middle Eastern countries are operating large production facilities.

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