Advancing a restructuring initiative for the formation of a green chemicals business

Mitsui Chemicals, Inc. (Tokyo: 4183; President & CEO: HASHIMOTO Osamu) announced that it has decided to close the phenol plant at its Ichihara Works by no later than fiscal 2026.

The Mitsui Chemicals Group¡¯s Basic & Green Materials Business Sector, which includes phenol business, is aiming to redefine itself as a sustainable green chemicals business centered around competitive derivatives. As the Group works toward an optimized production setup at our crackers line with demand, it will need to ensure that its derivatives are competitive ¨C a need which prompted the Group to begin restructuring its Basic & Green Materials Business Sector shortly after the 2008 global financial crisis. The Group is now further accelerating its efforts toward this end as part of a second phase of restructuring, which will include the newly announced plant closure.

Mitsui Chemicals currently produces phenol at three locations: Ichihara in Chiba, Takaishi in Osaka and Shanghai in China. Following the launch of phenol production at the Ichihara Works in 1970, Mitsui Chemicals¡¯ phenol business continued to grow, driven by rising demand for key derivatives bisphenol A and phenolic resin. Since 2022, however, a range of factors have made the business environment more difficult ¨C including falling domestic demand, as well as a drastic oversupply on account of new production facilities launched in China and other parts of Asia. Mitsui Chemicals has responded with a range of rationalization efforts in order to sustain the business, but has now decided that it is no longer feasible to secure the profitability needed to maintain phenol production at its Ichihara Works.

As a result, an impairment loss on fixed assets of this business was recorded as other operating expenses.