Feedstock competition may drive Japan's chemical industry to niche products

By Gurdip Singh
Correspondent

Published: September 13, 2013 5:07 pm ET
Updated: September 13, 2013 5:26 pm ET

Related to this story

Topics Materials Suppliers, Asia

SINGAPORE — Japan's chemical industry faces a tough feedstock competition and will have to intensify its focus on specialty and niche products, both for the domestic and export markets, say industry official at an industry conference in Singapore.

U.S. shale gas and oil, an eventual feedstock source for American petrochemicals, are a major threat to the Japanese chemicals industry, said Yasushi Nawa, managing director and CEO at Mitsui Chemicals Asia Pacific Ltd. in Singapore.

Methane hydrates — solid methane-rich compounds found under sediment in the deep ocean floor, are a "feedstock substitute hope" for the globally-challenged Japanese chemical industries. But experts say methane hydrate feedstocks may take decades to develop, and the eventual cost is still unpredictable.

Industry observers commended the premium quality of Japanese specialty chemical products, saying these were well respected in the developed Western markets. But there was a legitimate fear of being challenged by similar products produced by the revived American petrochemicals sector and the emergence of ambitious Chinese producers backed by Western technology.

The U.S. shale oil and gas resources are good for another 100 years of supplies. Their development has initiated the rebirth of the U.S. petrochemicals sector, said Balaji Singh, president of Houston-based CMR Inc. and organizer of the Singapore conference, "Global Polyolefins in Transition," held Sept. 11-13.

The Japanese know that the Chinese have much more shale gas and oil resources that the United States, and the Chinese's renowned ambition of mass production, using cheap resources, would re-write all market economics for specialty chemicals.

But Mitsui's Nawa still felt the Japanese were confident of working their way out through niche-product diversifications and research and development on new products. He added that opportunities still exist in the health care, sanitary care and food safety care segments.

He highlighted Mitsui's US$2 billion investments in semi-finished and finished product plants in Southeast Asia and China since 2000. Nawa said Mitsui is set to commercialize its latest investment of US$200 million in Singapore, including a 772 million-pounds-per-year polyethylene plant at Singapore's petrochemical hub on Jurong island, which will start production in January 2015.

Also, Mitsui is a 20 percent partner in a 661million-pound-per-year metallocene polymer plant on Jurong island. The plant, in partnership with Japan's Prime Polymer Co. Ltd., is scheduled to start production in the second quarter of 2015.

Mitsui, he said, was not taking any high-risk of investing in upstream facilities, such as naphtha plant. The company is comfortable to be aligned with third-party sourcing for feedstocks.


Comments

Feedstock competition may drive Japan's chemical industry to niche products

By Gurdip Singh
Correspondent

Published: September 13, 2013 5:07 pm ET
Updated: September 13, 2013 5:26 pm ET

Post Your Comments


Back to story


More stories

Image

Rotomolded toilet maker sees chance to help in sanitation crisis

March 6, 2015 1:03 pm ET

A 2013 United Nations study pointedly noted that more people worldwide have mobile phones than access to basic sanitation, but a South African...    More

Image

Cardia closing new film plant in Brazil

March 6, 2015 10:05 am ET

Australia-based bioplastics and film company Cardia Bioplastics Ltd. will close its Brazil manufacturing plant and invest instead in its Asia-Pacific ...    More

Image

Arkema adds Bostik to high performance materials business unit

March 6, 2015 9:24 am ET

Arkema SA has finalized the acquisition of Bostik SA from Total SA, bringing what it says is the world's No. 3 adhesives provider into its portfolio.    More

Image

Huntsman closing four pigment plants

March 5, 2015 3:36 pm ET

Huntsman Corp. is closing four plants — three in the U.S. and one in Germany — that make pigments for plastics and other markets.    More

Image

Bayer to stop MDI production in Brazil

March 4, 2015 9:21 am ET

Bayer AG's Bayer MaterialScience plans to stop production of MDI polyurethane at its plant near Rio de Janeiro in July, removing 55 metric tons per ye...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events