Japan’s petrochemical industry is undergoing another round of consolidation. Mitsubishi Chemical Group, the country’s largest chemical maker, says it has begun considering a spin-off of its petrochemical business (PDF), with the aim of completing the move in fiscal 2027.
The company has already agreed to merge its western Japan petrochemical operations with those of Mitsui Chemicals and Asahi Kasei. Under the plan, Mitsubishi and Asahi Kasei will shut down ethylene production at their jointly owned Mizushima complex and consolidate output at Mitsui’s Osaka ethylene center. Mitsubishi will take a 45% stake (PDF) in the new three-company venture.
Mitsubishi also operates an ethylene complex in Kashima, and the planned spin-off will include this operation. The firm says its goal is to prepare for future mergers and industry-wide restructuring. “Through alliances with other companies, we aim to further strengthen the competitiveness of our petrochemical business and contribute to the resilience of Japan’s industrial supply chain and its economic security,” CEO Manabu Chikumoto said at a management briefing on May 25.
The company previously attempted to separate its petrochemical and carbon businesses under CEO JeanMarc Gilson, who announced the strategy in December 2021 and explored partnerships and divestment options. No deals materialized. Gilson stepped down in March 2024, and Chikumoto—then head of the petrochemical division—succeeded him. Chikumoto has since advanced a restructuring strategy centered on alliances with domestic firms.
Japan’s petrochemical sector has been consolidating as demand patterns shift and competitiveness declines in overseas markets, particularly in East Asia, where companies from China and the Middle East have come to dominate.
Mitsui announced in May 2025 that it is considering spinning off its Basic and Green Materials business, which includes petrochemicals, by the end of fiscal 2027. On May 13 of this year, Asahi Kasei said it would take just a 10% stake in the three-company joint venture and withdraw from styrene and polyolefin production at its Mizushima site.
Further restructuring appears likely. “Given that it will hold a 45% stake in the western Japan petrochemical venture, Mitsui Chemicals is also expected to proceed with additional portfolio streamlining,” says Mikiya Yamada, senior analyst at Mizuho Securities. He expects Mitsui to reorganize its downstream derivatives businesses as the volume of cracked products it receives from the Osaka ethylene center declines under the new joint-venture structure.
