September 10, 2025 15:37

Japan’s petrochemical industry continues its consolidation and restructuring efforts, following the 2024 agreement between Asahi Kasei, Mitsui Chemicals and Mitsubishi Chemical to establish Setouchi Ethylene for ethylene production, and the planned closure of an ethylene cracker by Sumitomo Chemical and Maruzen Petrochemical to better align capacity with demand — mirroring similar developments in Europe.

A further step in this direction was taken yesterday as Mitsui Chemicals, Idemitsu Kosan and Sumitomo Chemical signed a memorandum of understanding to integrate Sumitomo’s domestic activities in polypropylene (PP) and linear low-density polyethylene (LLDPE) into Prime Polymer, the joint venture established in 2005 by Mitsui (65%) and Idemitsu (35%). Operations outside Japan are not included in the deal.

The transaction is expected to be finalized by spring 2026. At that point, Prime Polymer’s shareholder structure will shift: Mitsui Chemicals will retain majority ownership with 52%, Idemitsu Kosan will hold 28% and Sumitomo Chemical will take a 20% stake.

The joint venture’s production capacity will also be boosted, with polypropylene output reaching 1.59 million tonnes per year and LLDPE production at 720,000 tonnes annually. Net sales are projected at ¥387.3 billion, or approximately €2.4 billion.

Polyolefins account for about 50% of Japan’s total plastics demand, affirms Sumitomo Chemical. Despite a series of mergers and consolidations among Japanese producers since the 1990s, overcapacity remains a persistent issue. A shrinking population and changing consumption patterns are further reducing domestic demand for polyolefins, making it necessary to rationalize production and realign supply.

The integration of Sumitomo Chemical’s domestic PP and LLDPE businesses into Prime Polymer, the company added, will not only strengthen the Japanese polyolefins industry but also enhance its competitiveness against imports.

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