Mitsubishi Chemical abandons 350,000-tpy MMA plant in Louisiana (U.S.)
As Mitsubishi Chemical Corporation, a consolidated subsidiary of the Mitsubishi Chemical Group, announced in the news release "Mitsubishi Chemical Announces Land Purchase and Feasibility Study to Place a 350,000-tpy MMA Plant in Geismar, Louisiana" dated December 9, 2020, the Group had been considering the construction of a new MMA monomer plant in Geismar, Louisiana (US) that would utilize the Group’s proprietary “New Ethylene Process (Alpha Process)” technology (hereinafter, “Investment Plan”), but it hereby announces that it has resolved to terminate consideration of this Investment Plan.
Reason for terminating consideration of Investment Plan. Methyl methacrylate (MMA) monomer is a raw material for acrylic resins used in automobile lamp covers, signboards, aquarium tanks, paints, building materials, etc. Global demand for MMA monomer exceeds three million tons annually, and stable market growth is expected to continue. In preparation for a final investment decision on an MMA monomer plant that would use ethylene derived from US shale gas and employ the Group’s proprietary "New Ethylene Method (Alpha Method)" technology, the Group acquired a construction site in Geismar, Louisiana (US) and has since been working on front engineering design and obtaining the permits and approvals required by various regulations. However, the Group has come to the decision to discontinue consideration of the Investment Plan due in part to the prospect of meeting immediate demand with existing MMA monomer manufacturing facilities in Tennessee (US) and elsewhere and the failure in negotiations with customers to obtain long-term commitments on transactions after the execution of the Investment Plan based on increases in capital investment stemming from inflation and other factors.
The Group will continue to optimize its global production system by establishing new business locations and consolidating existing ones to boost the competitiveness of its MMA business and will pursue such growth strategies as focusing on high value-added applications and developing new applications in accordance with the "New Medium-Term Management Plan 2029" announced on November 13, 2024.
Impact on business performance. In connection with the decision to discontinue consideration of the Investment Plan, the Group expects to record a loss of approximately 20 billion yen in the third quarter of the fiscal year ending March 31, 2025, and thereafter due to impairment losses on expenses incurred to date for this Investment Plan. The amount of
impact is currently being scrutinized and an announcement will be promptly forthcoming if it becomes necessary to revise the consolidated earnings forecast for the fiscal year ending March 31, 2025.
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