Sumitomo Chemical to Suspend Part of its LDPE Production in Japan
Last update on Oct 31, 2024
will suspend part of its low-density polyethylene (LDPE) production at its Chiba Works in Ichihara City, Chiba Prefecture, Japan. This action, expected by the end of fiscal year 2024, will reduce annual production capacity by 20,000 tons. The company anticipates that this measure, combined with previous rationalization efforts, will improve the operating rate of its remaining facilities.
Declining Demand Due to Aging Population
LDPE is a synthetic resin known for its flexibility, transparency, impact resistance, chemical resistance, and electrical insulation. These qualities make it essential for a wide range of applications, including food and product packaging, agricultural films, food bottle materials, molded goods, and electrical wire coatings. LDPE supports various industries and is a key material in daily life.
However, LDPE demand in Japan has declined due to an aging population and low birthrate, with little expected growth ahead. In response to these changing market conditions, Sumitomo Chemical will streamline LDPE operations at Chiba Works. Additionally, it plans to enhance its product portfolio by focusing on high value-added areas to better meet customer needs. The company will also work on fixed-cost reduction at remaining facilities and strengthen competitiveness in raw materials. This includes a joint study with Maruzen Petrochemical Co., Ltd. to optimize the operations of their Keiyo Ethylene Co., Ltd. joint venture. Sumitomo Chemical will continue exploring all possible improvement measures.
Sumitomo Chemical is implementing short-term intensive performance improvement measures and, as part of these efforts, is accelerating the restructuring of its businesses. The Company will steadily advance these measures to ensure a V-shaped recovery in fiscal 2024, while also carrying out fundamental structural reforms.
Source: Sumitomo Chemical
Source
Sumitomo Chemical