Mitsubishi Chemical forms alliance with China's Sinopec

Published: 25 May 2009 18:17:01 PST

Petrochemicals Facing dismal prospects for its petrochemical business in Japan, Mitsubishi Chemical has reached an agreement in principle to team up with Sinopec. The agreement involves joint research projects, new joint ventures, sharing raw materials&logistics, and exchanging personnel. Mitsubishi stated that the agreement represented 'a new business model' for building a chemical business in Asia.

Mitsubishi announced that it would stop producing purified terephthalic acid in Japan and move management of the business to Singapore. Mitsubishi also produces this polyester raw material in Indonesia, China, South Korea, and India.

Sinopec and Mitsubishi have had numerous business relationships in past decades. In the 1970s, the Japanese firm licensed processes for making ethylene and polyethylene to Shanghai Petrochemical, a Sinopec company. The two have had a joint venture for automotive compounds for more than a decade. Sinopec and Mitsubishi are gearing up to form another venture to produce bisphenol A and polycarbonate in China.