Mitsubishi Chemical Group abandoned its plans to build a major methyl methacrylate plant in Louisiana, marking a setback for the Japanese chemical maker’s U.S. expansion strategy. The project, which would have been the company’s third facility using its proprietary Alpha technology, was terminated after costs nearly tripled to about 300 billion yen ($1.94 billion) from initial estimates.
The company will take a 20 billion yen write-off following the cancellation. The decision reflects growing challenges for chemical manufacturers trying to expand in the U.S., where construction and labor expenses have surged since the pandemic.
The plant was designed to produce 350,000 tonnes of MMA, a key ingredient in car headlight covers and other products. Mitsubishi Chemical, which controls about 30% of the global MMA market, had viewed the U.S. project as a strategic opportunity to leverage cheap shale gas and maintain its competitive edge against Chinese rivals.
Despite attempts to reduce costs by exploring modular construction methods, the company struggled to secure long-term commitments from customers willing to accept higher prices. A senior executive noted that while postponing the investment was considered, continued delays would have increased costs further.
The company’s president, Manabu Chikumoto, indicated that MMA remains a core business, suggesting the manufacturer may seek alternative locations for expansion.
