Sumitomo Chemical to Fold Japan Polyolefin Operations into Prime Polymer, Take 20% Stake

An announcement from Sumitomo Chemical Co ( (JP:4005) ) is now available.

Sumitomo Chemical has agreed to integrate its domestic polypropylene and linear low-density polyethylene businesses into Prime Polymer through a two-phase simple absorption-type company split, in exchange for a 20% equity stake in Prime Polymer, transforming the latter into a three-party joint venture with Mitsui Chemicals and Idemitsu Kosan. The move aims to address chronic oversupply and shrinking demand in Japan’s polyolefin market by consolidating operations, optimizing production in the Keiyo region, and pursuing annual cost savings of more than ¥8 billion, while bolstering competitiveness against imports and accelerating the development of high-performance, lower-environmental-impact plastics to support a “green chemical” business strategy; the transaction is subject to regulatory clearances but is expected to have only a limited impact on Sumitomo Chemical’s balance sheet and sales ratios.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen506.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

More about Sumitomo Chemical Co

Sumitomo Chemical Co., Ltd. is a major Japanese chemical manufacturer with a broad portfolio spanning petrochemicals and plastics, including polypropylene (PP) and linear low-density polyethylene (LLDPE), which serve key end markets such as automobiles, electronics and medical devices. Prime Polymer, a long-established polyolefin joint venture between Mitsui Chemicals and Idemitsu Kosan, is a leading producer of PP and polyethylene in Japan, operating significant production bases in the Keiyo industrial region.

Average Trading Volume: 10,570,914

Technical Sentiment Signal: Buy

Current Market Cap: Yen720.1B

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