Petrotahlil - Japanese chemical firm Sumitomo Chemical will lower its investment target in the petrochemical and plastic business for April 2019-March 2022, amid weakening plastic demand in light of Covid-19.
Sumitomo Chemical aims, in its three-year plan, to invest approximately 10pc of the company's total investment of ¥850bn ($7.9bn) during April 2019-March 2022 in petrochemicals and plastics. This is down from the original plan to invest some 20pc of ¥700bn over the same period.
The company will postpone some of its unspecified investments planned during the period, to the next three-fiscal years starting in April 2022. The company foresees that Covid-19 will continue to cut demand for its products including plastics for auto parts.
Sumitomo Chemical owns production capacity of 3.1mn t/yr of ethylene and 403,000t/yr of methyl methacrylate (MMA) monomer. Its polymer production capacity includes 1.7mn t/yr of polyethylene, 1.7mn t/yr of polypropylene and 3.3mn t/yr of polyolefin. The company also manufactures propylene but did not disclose production capacity.
Japan produced 6.3mn t of ethylene during April 2019-March 2020, up by 1.4pc over the year. It also increased propylene production by 3.1pc in a year to 5.4mn t, showed data from the ministry of economy, trade and industry. The country's MMA monomer production edged lower by 0.5pc over the period to 4.2mn t, according to the data released by Japan Petrochemical Industry Association.