Mitsubishi Chemical HoldingsTHE KAITEKI COMPANY

Overview of Business Segments : Industrial Materials Domain

MCHC will continue to advance the diversification of raw materials, including renewable resources, provide products and technologies through a framework that reflects the needs of the time, and support growing markets.

Major Businesses and Products

MMA

Fiscal 2016 Revenue

¥285.9 billion

MMA
MMA
We are the only company that employs all three main manufacturing methods* and maintains a leading 40% share of the global market. With a globally established supply system that takes advantage of raw material availability for individual plants and cost competitiveness, we aim to realize the most advanced and sophisticated operations.
*Acetone cyanohydrin (ACH) method, C4 direct oxidation process, and new ethylene process (Alpha Technology)
PMMA
PMMA (acrylic resin) has various excellent characteristics such as superior transparency, strong weatherability and formability. We operate business with a variety of PMMA products including acrylic sheets for signs, display shelves and aquarium tanks, molding materials for automotive products, optical components and home electronic parts, and plastic optical fibers.
MMA PMMA

Petrochemicals

Fiscal 2016 Revenue

¥500.3 billion

Petrochemicals
Basic petrochemicals and basic chemical derivatives
Our ethylene plants are located in Kashima and Mizushima* in Japan. We provide olefins such as ethylene and propylene, and aromatics such as benzene and toluene. We also deal in various ethylene, propylene and C4 derivatives, terephthalic acid, and more.
* The Mizushima ethylene plant is owned by Asahi Kasei Mitsubishi Chemical Ethylene, which is jointly owned by Asahi Kasei and Mitsubishi Chemical.
Polyolefins
Our polyolefin (polyethylene and polypropylene) business offers high quality and high performance product lineups in a wide range of fields including automobiles, electrical wires, medical devices and food packaging based on proprietary catalyst and process technologies. We are also expanding its business outside Japan as a global supplier of high performance materials while developing the growing global markets including the automobile industry.
Basic petrochemicals Basic chemical derivatives Polyolefins

Carbon Products

Fiscal 2016 Revenue

¥197.9 billion

Carbon Products
Coke
Coke supports the global steel industries, and various products are also produced from the tar created by the coke manufacturing process. Each year we import coals from countries around the world and produce coke of different qualities by blending around 60-70 types of raw materials in various combinations.
Carbon black
Carbon black is a material used for products found in daily life, such as tires, printing ink, and colored resins. We manufacture carbon black under consistent quality control throughout the process beginning from raw material processing to the final products.
Coke Carbon material Carbon black Synthetic rubber

Industrial Gases

Fiscal 2016 Revenue

¥574.6 billion

Industrial Gases
Industrial gases
We have a leading 40% share of the domestic market for industrial gases, mainly oxygen, nitrogen and argon. We are expanding our business areas overseas while focusing on North America, Asia and Oceania as key markets.
Industrial gas-related equipment and facilities
Besides our domestic production of Japan’s first air separation plant, we have earned a stellar reputation as a world’s top-class plant manufacturer through the production of space-simulation chambers and liquid helium-related equipment.
Industrial Gases Industrial Gas-related equipment and facilities

SWOT Analysis

SWOT Analysis

Industrial Materials Domain APTSIS 20

Policies
Stabilization of earnings by strengthening of costcompetitiveness Acceleration of growth and strengthening of presence in the global market
Key Strategies
■Strengthening of cost-competitiveness
■Acceleration of global development (MMA, industrial gases)
■Business rebuilding
Plan Values

Growth Strategies of MMA

To maintain its competitive advantage as the world’s leading supplier of MMA monomers with a market share of around 40%, we will seek to boost production capacity and optimize its production system. We have established a joint venture with SABIC(Saudi Basic Industries Corporation) in Saudi Arabia. Under this joint venture, a plant with the world’s largest production capacity based on the competitive New Ethylene Method (Alpha Technology) using natural gasbased raw materials, will start its operation in the middle of 2017. Construction of another plant that would use shale gas-based raw materials is being considered for North America. We will continue to optimize its production systems based on the supply and demand environment so as to ensure stable revenue.

MMA Production Sites and Market Share by Region

Strategic Approach to Strengthening Competitiveness of Petrochemicals

Up to 2016, we pursued the consolidation of its domestic ethylene centers and the equity interest transfer of its terephthalic acid businesses in India and China. We had specific aims in these structural reforms, preparing ahead of its competitors for the so-called “arrival of black ships” in which competitive products using North American shale gas as raw materials entered the Asian markets. Looking ahead, we will continue to strengthen competitiveness by further reinforcing the foundations of its production sites and optimizing production while seeking to maximize earnings through improved added value targeting the unutilized fraction between cracker and derivatives, the development of high-performance polyethylene and polypropylene, and the expansion of technology licenses through a refinement of possessed technologies.

Strategic Approach to Strengthening Competitiveness of Petrochemicals

Expansion of overseas business areas for industrial gases business and sustainable growth of domestic businesses

Taiyo Nippon Sanso Corporation (“TNSC”) has a leading 40% share of the industrial gas market in Japan. Having expanded its business areas with focus on North America, Asia and Oceania as key markets, the company has developed operations in 19 countries and regions around the world to date.

While the domestic industrial gas market has been experiencing the medium-range low growth, in regions such as North America, Asia and Oceania, further growth is expected in the future, and further oligopolization by major industrial gas producers in Europe and North America has been taking place. To compete with those major industrial gas producers in Europe and North America, we will pursue sustained growth domestically and seek to expand our overseas operations.

Specifically, “structural reform,” “innovation,” “globalization” and “M&A” will form the pillars of our strategy. By maximizing Group synergy through the expansion and structural reforms of gas and gas-related businesses domestically, we will further reinforce our industry-leading position. And overseas, we will aggressively promote capital investment and M&A activities in an effort to expand our business areas.

In fiscal 2016, TNSC acquired the U.S. industrial gas business and assets of Air Liquide S.A., the biggest such acquisition in its history. The acquisition meant that in addition to its existing operations primarily in the southern and Midwestern U.S., TNSC acquired a business network in the Eastern U.S. and a more robust operating network in the Midwest. Moreover, with the acquisition of Supagas Holdings Pty Ltd in Australia, TNSC completed a sales network spanning the entire country.

TNSC plans to invest further ¥340 billion from fiscal 2017 to fiscal 2020, 70% of which it plans to allocate toward strategic investments. TNSC will endeavor to fully utilize these investments to further expand its business areas primarily overseas and achieve sustained growth in its domestic business.

Promotion of M&A strategy
Solutions for Environmental and Social Issues

Established production facilities for liquefied carbon dioxide at Mizushima plant of Nippon Ekitan Corporation

TNSC’s group company Nippon Ekitan Corporation handles liquefied carbon dioxide. Roughly 50% of carbon dioxide gas is used in iron welding as a shielding gas. It is also used in various other applications such as beverages, and the freezing or chilling of foods.

In recent years, due to the decreasing demand for fuel oil and the closure of domestic ammonia production facilities, the production of high-concentration carbon dioxide gas as a raw material has declined significantly, which caused tight supply-demand balance of finished products. Particularly, productions in the Chugoku and Shikoku regions have declined drastically, resulting in constant long-distance transport from other regions. Production of high-concentration carbon dioxide gas as a raw material from this business category is expected to decline further in the future.

Nippon Ekitan plans to establish liquefied carbon dioxide production facilities at the Mizushima plant in October 2017. The facilities will be able to collect the low-concentration carbon dioxide generated from the MCC Mizushima site on the same premises and effectively utilize it as high-quality liquefied carbon dioxide. As the production process involves effectively utilizing carbon dioxide gas that would otherwise have been released into the atmosphere instead of generating new carbon dioxide, the facilities significantly contribute to reducing environmental load, and also help to reduce long-distance transportation by ensuring a more stable supply to users in the Chugoku, Shikoku and Kansai areas.