Sumitomo Chemical recently announced its decision to close down its production facilities for caprolactam, a raw material for nylon, at its Ehime Works, Niihama city, Ehime, Japan in October 2022, and exit the business.

 

Sumitomo Chemical started production of caprolactam at its Ehime Works in 1965, employing a liquid-phase process, and has since been engaged in the business for more than 50 years. In 2015, as global production capacity swelled, primarily driven by a large buildup in China, the company shut down its liquid-phase process production line to focus on its gas-phase process production line, which produces no ammonium sulfate as a by-product. During these years, while it continued to pursue technology improvements and cost reductions, the company has come to the conclusion that, going forward, it would be difficult to secure sustainable competitiveness, and has therefore decided to exit the caprolactam business. Sumitomo Chemical will, however, continue to manufacture and sell cyclohexanone, an intermediate raw material for caprolactam, as the business environment for that product is expected to remain solid.

 

While the production of caprolactam will be discontinued, Sumitomo Chemical is actively transforming the operations of Ehime Works in response to changes in the market. After a production capacity expansion for the feed additive methionine in 2018, the Company has started construction of plants for high purity chemicals for semiconductors and its liquid crystal polymer (LCP) SUMIKASUPERTM, which is a super engineering plastic, at Ehime Works. In addition, to prepare for the new era of carbon neutrality, the Company is constructing a chemical recycling pilot facility for acrylic resin at the Works and reconfiguring its infrastructure by inviting an affiliated company to build an LNG terminal within the site.

 

Under its Corporate Business Plan for FY2022 to FY2024 launched in April, Sumitomo Chemical will enhance the earnings power of its technology-driven businesses while also accelerating the transformation of its business portfolio to direct management resources to high-growth business areas. The exit from the caprolactam business is in line with this policy, and Sumitomo Chemical will continue to further strengthen its business portfolio.