TOKYO, June 11 (Kyodo) — Mitsubishi Chemical Corp. on Monday announced plans to cut its ethylene production capacity by about 30 percent and instead pour more resources into money-making, high-tech materials.
Mitsubishi Chemical will shut down one of the two plants at its ethylene complex in Kamisu, Ibaraki Prefecture, northeast of Tokyo, in the summer of 2014 to reduce costs by about 4 billion yen.
There will be no layoffs for the employees at the plant as they will be reassigned within the company, Mitsubishi Chemical said.
The company, a unit of Mitsubishi Chemical Holdings Corp., currently has two ethylene production facilities at the Kashima industrial complex and another at the Mizushima industrial complex in Kurashiki, Okayama Prefecture, with a combined output capacity of around 1.21 million tons per year. The plant to be halted in two years has an annual production capacity of about 340,000 tons of ethylene.
A fall in ethylene prices, due largely to steep production increases in China and the Middle East, has caused concern regarding the profitability of Japanese chemical makers.
The company is also considering reviewing production capacity at the Mizushima industrial complex it has been cooperating with Asahi Kasei Corp. since last year.
Mitsubishi Chemical last stopped ethylene production at its Yokkaichi plant in Mie Prefecture, central Japan, in 2001.