Mitsubishi Chemical said it would exit from petrochemical and coal chemicals business as domestic market has limited growth potential. Moreover, Japan’s National Energy Policy is transitioning toward carbon neutrality and basic chemical industry has to embrace de-carbonisation. Also, there is high probability of increasing cost in Japan driven by CO2 reduction efforts, the company said in a presentation.

The company said that the operations would be carved out by fiscal 2023. The statement outlined a new vision for the company and said its plan was part of a bid to "spearhead the reorganisation of the domestic basic chemicals industry".

'In the medium term it is our goal to completely exit these businesses,” Jean-Marc Gilson, CEO, Mitsubishi Chemical Holdings, said at the briefing, citing the rising cost of energy that’s set to drive consolidation in Japan. The units will likely first be merged with another Japanese firm, after which Mitsubishi Chemical will exit through a sale or IPO, he said.

The company said it will reduce costs by more than JPY100 billion per year by fiscal 2025.