Chemicals Division – Main Businesses & Vision –
Conducts trading and business investment in liquid chemicals, mainly methanol; petrochemical products such as plastics; and inorganic chemicals and mineral-related products such as industrial salt and rare earths.
- ▶ Chemicals: Methanol, solvents, liquid chemicals, high-performance resin monomers, butadiene, phenol, raw materials for resins and synthetic fibers, raw materials for plastic resins, and plastic products
- ▶ Ecological Materials & Resources: Rare earths, lithium, aluminum hydroxide, industrial salt, graphite, cellulose materials, high-performance nonwoven cloth, raw materials for paint, liquid crystal, display materials, carbon fiber, LED materials, barite, etc.
|・||Sojitz has an established product chain for dicyclopentadiene (DCPD), heavier component in petrochemicals, as a priority business in the United Sates.|
|・||Sojitz acquired equity stake in Metton America Inc. in 1994 who produces poly-DCPD resin, thermoplastics used in RIM (Reaction-Injection Molding) technology.|
|・||To expand this business even further, Sojitz acquired an interest in Cymetech Corporation, a manufacturer of DCPD, in 2008 and established an integrated supply chain extending from raw materials to resin products.|
|●||[Major Business Activities] Metton (poly-DCPD) Business|
|●||[Major Business Activities] Hydrocarbon resin Business|
|・||Manufacturing and providing a stable supply of methanol to the Japanese and Asian markets. Methanol has a rising demand for raw material in products such as adhesives, synthetic fibers, engineering plastics and energy applications.|
|●||[Major Business Activities] Methanol Business|
Marine Chemicals (Industrial Salt)
|・||Top class among trading companies in volume of industrial salt, a key basic raw material with broad applications. Our salt comes from India.|
|●||[Major Business Activities] Chlor-alkali Business|
|・||Developing, producing, and providing a stable supply of barite and rare earths. The former has become an essential material in the shale gas revolution, while the latter are important resources used in everything from electric vehicles to LCD displays.|
|●||[Major Business Activities] Rare Earth Business|
|・||Meeting growing plastic demand which accompanies the high economic growth of emerging nations.|
|・||Supporting sustainable society with green polyethylene, a plant-based polyethylene which is anticipated to lessen the effects of global climate change by reducing CO2 emissions, as well as help countries move away from their dependence on petroleum.|
Business Overview and Vision
Contributing to development by offering value that translates to growth for client companies and promoting circulation in industry
- ▶ The Chemicals Division plays a role in circulating and energizing many different industries around the globe by providing the lifeblood of industry, with a mission to constantly bring ideas to the market and to continuously generate added value that supports the growth of client companies in each value chain.
- ▶ Accomplishments include various necessities of life such as development of functional textile materials; provision of packaging materials and synthetic agrochemicals to increase food production; solar power generation and supply of related materials; and improvement of vehicle fuel efficiency through the replacement of metal components with plastic equivalents for vehicle weight reduction.
Strengths That Drive Value Creation
- ▶ A business scale that compares favorably with chemical divisions of competing trading companies
- ▶ An extensive global customer base, which is behind the wide variety of products and materials we supply and value chains that extend from upstream to downstream sectors
- ▶ Industry-leading scale methanol business, with a production base in Indonesia
- ▶ A plastic resin business, with a global sales and procurement network through which we handle approximately 1 million tons per year
- ▶ A marine chemicals (industrial salt) business, with strengths such as short lead time for supply to Asian regions and price competitiveness
- ▶ A value chain from production to sales in the U.S. petroleum resin business
Strategies and Initiatives
Global industrial production and distribution structures are on the cusp of significant changes, and the map of major supply and demand regions is likely to change too. In this context, the Chemicals Division will seek to create value by identifying changes in the operating environment as quickly as possible and making aggressive business investments while expanding global trade. Instead of focusing mainly on Japan and Asia as in the past, we will work to capitalize on growing demand in regions with a high concentration of automotive industry participants, such as India and Mexico, and will also target expansion in China and North America.
Specifically, we are strategically poised to enhance value chains by coordinating investment that will expand our five strong businesses – methanol, petroleum resin, plastic resin, marine chemicals and rare resources – and make them into stronger, larger clusters of revenue-generating businesses.
All of our business investments so far are proceeding smoothly and showing results. In the marine chemicals business that we entered in India, investment to expand has been successful and industrial salt handling volume has risen steadily to 4 million tons per year. In the plastic resin business, our sales volume is approximately 1 million tons per year globally, but we are aiming to expand this to around 1.5 million tons. In a new development, in March 2017 we acquired solvadis, one of the leading chemical distributor and marketing companies in Europe. We have been producing and selling about 1 million tons of methanol per year in Asia, but with this acquisition our annual trading volume will be around 2 million tons. In specialty chemicals, we aim to create synergies on a global scale through the integration of the strong business platform of solvadis.
In order for the Chemicals Division to build experience in trading that effectively addresses changes in the operating environment and promote value creation, we need to fully understand client companies’ growth strategies and initiate joint projects with business partners. A distinctive feature of the chemicals industry is that connections forged among regions and among companies from a market perspective give rise to new products and markets. As such, we view our human resources as the key to growth, and place particular emphasis on employee training. We are developing a full array of measures in this area, including a training program for managerial candidates that involves exchange with other industries, a curriculum for making investment and loan proposals to division COOs, and a basic training program for young employees covering business management and accounting principles.
In the Chemicals Division, each employee will continually take on new challenges by demonstrating leadership to achieve growth for client companies. Our businesses will expand and mature as a result. Underpinned by these efforts, we aim to increase corporate value for the Sojitz Group.
Focus Area: Environment-Related Businesses
Focusing on growth areas in our broad range of environment-related businesses
Sojitz Pla-Net Corporation, a subsidiary of Sojitz specializing in plastic resin materials and products, is conscious of natural ecosystems and local environmental issues, and helps to preserve the environment and prevent pollution through its business activities, in line with the Sojitz Environmental Policy. In renewable energy-related businesses, the company operates a small-scale windpower generation business that sells small wind turbines from U.S. company Xzeres Wind in Japan. Small windpower generation is generally defined as output of less than 20kW, and is easier to install than large-scale wind power systems, therefore more widely used. Sojitz Pla-Net also handles green polyethylene, a raw material made from 100% plant-derived resin and used mainly in plastic bags and plastic containers. In addition, the Chemicals Division handles materials that lead to vehicle weight reduction and materials for lithium-ion batteries used in electric cars. These are just some examples from the division’s broad range of environment-related businesses.
|▶||Rising global demand for chemicals driven by structural changes in industry and economic growth in emerging countries|
|▶||Increasing trade volume of synthetic agrochemicals and nonedible resources used for increasing yields and improving efficiency to address growing social and environmental issues in each country|
|▶||Possible decrease in competitiveness or trade volume of some products due to tighter safety and environmental regulations in certain countries|
|▶||Pressure on earnings due to volatile market conditions and fluctuations in foreign exchange rates|
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