Under the impact of China's production capacity, Japan's old chemical companies were forced to withdraw from their business for more than 50 years

Sumitomo Chemical announced on April 15 that it has decided to withdraw from the caprolactam business and will close its production facility in Ehime, Japan by October 2022
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Sumitomo Chemical has been producing caprolactam by the liquid phase method at its Ehime Plant since 1965, and has a history of more than 50 years
.
The soon-to-be-closed gas-phase caprolactam plant started operations in June 2003
.

In recent years, the increase in global caprolactam production facilities, especially in China, has led to a deterioration in the profitability of Sumitomo Chemical.
Its liquid-phase caprolactam plant was closed in 2015 with an annual capacity of 95,000 tons
.

Since then, in order to improve business conditions, Sumitomo Chemical has continued to improve technology and reduce costs
.
However, Sumitomo Chemical said that its caprolactam business would find it difficult to secure competitiveness in the future, so it decided to withdraw
.

However, Sumitomo Chemical believes that cyclohexanone, the intermediate raw material of caprolactam, is expected to have a stable market environment and will continue to produce and sell
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At the Ehime Plant, Sumitomo Chemical is actively working to adapt to changes in the market
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In 2018, the company expanded its feed additive methionine plant, and started construction of high-purity chemicals for semiconductors and liquid crystal polymer (LCP) plants
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In addition, in response to the carbon neutrality era, Sumitomo Chemical is building a demonstration facility for chemical recycling of acrylic resins, and will introduce LNG facilities in the factory
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According to Japanese media reports, the current global annual demand for caprolactam is 6 million tons, and the annual supply capacity is 8 million tons, showing a situation of oversupply
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In Japan, UBE (formerly Ube Industries) and Toray are large caprolactam producers, and Sumitomo Chemical has closed down only 85,000 tons of production capacity
.

This is not the first time Sumitomo Chemical has withdrawn from traditional businesses
.
In September last year, Sumitomo Chemical announced that it would stop the production of 40,000 tons/year of synthetic rubber ethylene propylene rubber (EPDM) at its Chiba plant, and to terminate sales at the end of March 2023
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Sumitomo Chemical said that in the mid-term management plan for the 2022-2024 fiscal year starting in April, it will strengthen the profitability of technology-based businesses and promote the metabolism of business in growth markets
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This business retreat is in line with such a policy and will continue to drive the maturity of the business portfolio
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In recent years, Japan's chemical industry is accelerating its structural transformation, and exiting the traditional petrochemical business has become one of the main options
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For example, Mitsui Chemicals announced on March 15 that it will close the purified terephthalic acid (PTA) plant in Otake Iwakuni, Japan in August 2023
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Mitsubishi Chemical decided at the end of 2021 that it will withdraw from the petrochemical and coal chemical business in the next few years
.