MOSCOW (MRC) -- Oversupply of purified terephthalic acid (PTA), mainly from China, has prompted Mitsubishi Chemical to off load Indian as well as Chinese PTA businesses, says Business Standard with reference to a Nikkei Asian Review report.
Thus, Mitsubishi Chemical Holdings is planning to sell its PTA business, the primary raw material used to manufacture various polyester products and polyethylene terephthalate (PET), in India and China amid profitability concerns with oversupply of the acid, mainly from China, according to a Nikkei Asian Review report.
MCC PTA, Mitsubishi Chemical Corporation’s PTA venture located in Haldia (West Bengal), started commercial production at the plant in 2000 with an aim to produce high-quality products to gain market share in the ASEAN countries. But, with the onslaught of cheaper Chinese products, the company gradually lost out and decided to concentrate in the domestic market. With Chinese imports increasing manifold leading to oversupply, the venture has been incurring losses for the past few years.
According to Nikkei report, Mitsubishi Chemical will offload its share in the Indian PTA venture to a US-based fund that owns a chemical manufacturer in Haldia, West Bengal, while the Japanese firm plans to sell its shares in a Chinese unit to an oil refinery in Ningbo, Zhejiang Province.
We remind that, as MRC reported previously, in October 2014, Mitsubishi Gas Chemical Co. decided to discontinue its PTA business. Mitsubishi currently operates a 260,000-t/y PTA plant at Mizushima, Japan, through its Mizushima Aroma joint venture with Toyobo Co. A spokesperson at Mitsubishi, when asked for the reason behind its decision to quit the PTA business, said "we cannot anticipate improvement of the profit without global oversupply." The company is "now examining" when to exit the business, he added.
Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC