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Sanyo Chemical, Nippon Shokubai terminate merger plans

October 21/2020

MOSCOW (MRC) -- Nippon Shokubai and Sanyo Chemical have postponed their plan to merge via a share transfer, which would have formed an integrated holding company named Synfomix Co, said Chemweek.

The deal was announced in May 2019. The companies had planned to establish the holding company on 1 October 2020, located in Kyoto, Japan, subject to regulatory approval.

The companies say that the global outbreak of the COVID-19 pandemic and resulting sharp decline in oil and oil product markets have made the business environment unpredictable. They say that significant changes in raw material prices and product prices, as well as heightened uncertainty surrounding product demand in the future made it difficult to carry out the planned business integration.

Shokubai and Sanyo have combined annual sales of about GBP511.2 billion (USD4.7 billion) and operating profit of GBP39 billion. The merged entity would have been the 11th-largest chemical company in Japan, ranked by sales. Shokubai is currently the 14th-largest firm and Sanyo ranks 20th, according to company reports.

Shokubai said earlier that the business environment surrounding the chemical industry is increasingly difficult. In Japan, demand for chemicals is expected to decline due to a changing social structure including a decrease and aging of the population, which is causing intense competition between chemical manufacturers.

Demand for chemicals is increasing in emerging countries due to rising population and income levels, but the expansion of chemical manufacturers in those countries and increasing scale disparity with big European and US chemical players are causing the Japanese chemical industry to be less competitive, Shokubai added.

Shokubai currently has a 5.0% stake in Sanyo. The biggest shareholders in Sanyo are Toyota Tsusho with 19.4% and Toray Industries with 17.3%.

As MRC reported earlier, JXTG Nippon Oil and Energy brought on-stream its cracker in Kawasaki on April 28,2020, following a turnaround. The cracker was shut for maintenance on February 27, 2020. Located at Kawasaki in Japan, the cracker has an ethylene production capacity of 460,000 mt/year and propylene production capacity of 235,000 mt/year.

We remind that Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased year on year by 5.3% in the first eight months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-July output. August production of benzene fell to 102,000 tonnes from 95,300 tonnes a month earlier due to scheduled shutdowns for maintenance at several producers. Overall output of this product reached 918,300 tonnes over the stated period, down by 0.9% year on year. At the same time, August production of primary polymers rose to 888,000 tonnes against 838,000 tonnes in July due to increased capacity utilisation at ZapSibNeftekhim, Stavrolen and Gazprom neftekhim Salavat. Overall output of polymers in primary form totalled 6,630,000 tonnes over the stated period, up by 15.2%  year on year.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, Nippon.
Category:General News
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