Three of Japan’s largest chemical producers have agreed to consolidate their commodity polyolefin operations, creating a dominant force that will control more than 30% of the country’s plastic production capacity, Nikkei reported.
Mitsui Chemicals, Idemitsu Kosan and Sumitomo Chemical plan to merge their polyolefin businesses through Prime Polymer, which is currently 65%-owned by Mitsui and 35%-owned by Idemitsu. Sumitomo Chemical’s polyolefin unit will be folded into this structure, combining domestic production, marketing and research operations.
The consolidation reflects mounting pressure on Japan’s chemical industry from overcapacity and intensifying competition from Chinese producers. Japanese petrochemical facilities have operated below 90% capacity since August 2022, with monthly utilization rates dropping below 80% multiple times, according to industry data.
Prime Polymer already ranks as Japan’s largest polyolefin producer with 2.1 million tons of annual capacity. The merger will further strengthen its market position as companies grapple with structural challenges including rising energy costs and weak domestic demand.
The move follows a broader restructuring wave across Japan’s chemical sector, where companies are divesting non-core operations and seeking economies of scale. Sumitomo Chemical alone has targeted ¥500 billion ($3.2 billion) in business restructuring and inventory reductions as part of its turnaround efforts.
An official announcement is expected as early as Wednesday.
