Mitsubishi Chemical Group Corporation has announced a major revision to its investment plan in the United Kingdom for SoarnoL, its ethylene-vinyl alcohol resin (EVOH) business, citing rising costs, construction delays, and mounting complexity at its Hull-based expansion project.
The company, led by Representative Corporate Executive Officer and CEO Manabu Chikumoto, said the decision affects its consolidated subsidiary Mitsubishi Chemical UK Limited, which manufactures and markets SoarnoL.
SoarnoL, developed using Mitsubishi Chemical Corporation’s proprietary technology, is known for its strong gas barrier performance, oil resistance, and clarity. It is widely used in food packaging, where it helps extend shelf life and reduce food waste. Its ability to be produced in thinner formats also supports reduced plastic usage.
The UK expansion was originally designed to boost annual production capacity by 21,000 tons. But Mitsubishi Chemical Group said the project has been hit by structural and operational complications, including irregular construction work, complex contracting frameworks, and additional safety assessments.
These challenges have led to delays across multiple stages of the project, while revised design and on-site estimates revealed significantly higher construction costs. The company also pointed to surging global material and labor costs driven by inflation.
As a result, Mitsubishi Chemical Group acknowledged that overall investment has had to be increased, with a corresponding hit to profitability. The company confirmed the new manufacturing facility is now scheduled to begin operations in fiscal 2027.
In a stark financial impact disclosure, the group expects to record an impairment loss of approximately 30 billion yen for the fiscal year ended March 31, 2026, tied to SoarnoL-related fixed assets and previously incurred investment costs.
Crucially, the charge was not included in the company’s earnings forecast announced on February 5, 2026. Mitsubishi Chemical Group said its full-year consolidated results are now under review and that it will update guidance if necessary.
Despite the setback, the company reaffirmed SoarnoL as a strategic growth driver under its KAITEKI Vision 35, which prioritizes food quality preservation as a key business area.
MCG emphasized that SoarnoL remains central to its Chemicals Business strategy and said it will continue investing in materials that support food preservation and sustainability goals.
The revised outlook comes against a mixed financial backdrop. The company reported FY2026 forecast sales revenue of 3,672,000 million yen, compared with 3,947,566 million yen in the previous fiscal year, while net income attributable to owners of the parent is projected at 47,000 million yen versus 45,020 million yen a year earlier.
