Japanese petrochemical producers Sumitomo Chemical and Prime Polymer have finalised their contract to integrate Sumitomo's polyolefin production businesses with Prime Polymer, aiming to enhance the competitiveness of their polyolefin businesses.
Prime Polymer — a joint venture between petrochemical firm Mitsui Chemicals and refiner Idemitsu — will merge Sumitomo's domestic polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses on 1 July 2026, the companies said on 24 December.
Sumitomo's PP and LLDPE production-related assets will be integrated into Prime Polymer later on 1 April 2027, as the system integration will take some time after the business merger, the companies said.
After the integration, Prime Polymer will have a production capacity of 1.59mn t/yr for PP and 720,000 t/yr for PE in Japan. Mitsui will hold a 52pc share in Prime Polymer and Idemitsu will have 28pc, with Sumitomo newly acquiring 20pc in exchange for the integration of its polyolefin businesses into Prime Polymer.
Currently Mitsui and Idemitsu hold a 65pc and 35pc share in Prime Polymer respectively. Prime Polymer has a production capacity of 1.26mn t/yr for PP and 550,000 t/yr for PE in Japan currently.
Demand for domestically produced polyolefins will continue to decline because of shrinking domestic demand, population decline and changing lifestyles, the companies said. The companies aim to optimise their polyolefin businesses and achieve annual cost savings of over ¥8bn/yr ($51mn/yr) through this business integration.
Idemitsu, Mitsui and Sumitomo first announced this integration plan in September.
