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Both sides did not disclose the details of the cooperation, but said that the contents of the cooperation include joint research and development projects, the formation of joint ventures, the sharing of raw materials and products and logistics services and the organization of personnel exchange activities. Mitsubishi Chemical said the cooperation agreement represents a "new business model" for building a chemical business in Asia.
Japan's petrochemical market has been in a slump for several years. The sweeping global financial crisis has further increased the pressure for Japan Petrochemical Corporation to restructure its business.
In February of this year, Mitsubishi Chemical announced that it would stop producing refined terephthalic acid in Japan due to unsatisfactory market pressure. At the same time, Mitsubishi Chemical moved this part of its business management organization to Singapore. The company still produces this product in Indonesia, China, South Korea and India. In early April, Japan’s Mitsui Chemicals and Sumitomo Chemical also announced that they would stop producing polystyrene in Japan.
Sinopec and Mitsubishi Chemical have cooperated several times in the past few decades. In the 1970s, the Japanese company once transferred its proprietary ethylene and polyethylene technology to Shanghai Petrochemical, a subsidiary of Sinopec; and the two established automobile compounding joint ventures have operated for more than a decade. In addition, both parties are stepping up their efforts to establish another joint venture in China to produce bisphenol A and polycarbonate.
According to Mitsubishi Chemical, although the agreement signed by the two parties is only a framework agreement, it will help Mitsubishi Chemical obtain the supply of paraxylene from Sinopec and help develop more efficient organic optoelectronic module components.
Mitsubishi Chemical is the first manufacturer of terephthalic acid in Asia and the second largest in the world. Mitsubishi Chemical and Sinopec giant Sinopec (Sinopec) have recently reached a cooperation agreement in the face of a downturn in Japan’s petrochemical business.
May 07, 2021