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| January 4, 2016 |
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Summary of President Ishizuka's New Year Message
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Mitsubishi Chemical Corporation
Last year, while the U.S. economy was strong and the Chinese and European economies decelerated at a slower pace than initially feared, crude oil and naphtha prices bottomed out in March and increased slightly after that. These factors brought us an increase in profits for the first half of the fiscal year. We expect to exceed our full-year target for operating income even though crude oil prices may fall to the lower half of the $30 per barrel range and we will post an inventory valuation loss in the second half. This is evidence that our company has returned to fighting shape thanks to group-wide efforts on business structural reforms and reduction of fixed costs.
Looking back at 2015, in the petrochemical business, the No.1 ethylene production facility at the Kashima Plant shut down in May, while the other ethylene production facilities at Kashima and Mizushima remain in full operation. We also optimized polyolefin production, reflecting our efforts to shift toward high-performance products. The terephthalic acid business continues to face tough going due to excessive production capacity in China, but we will take drastic measures during fiscal 2016. Turning to information and electronics, it will take time to launch businesses such as GaN and OLED. This is an issue to be addressed in the next medium-term management plan, APTSIS 20. In performance chemicals, we can expect the completion of our ion exchange resin plant in Korea to help us expand sales in Asian markets. Looking at food ingredients, we made steady progress toward growth with our decision to acquire Esai Food & Chemical Co., Ltd. and the completion of fully artificial light-type plant factory in the Odawara Plant. We set the stage for growth in specialty chemicals with the establishment of Japan Coating Resin Corporation and the integration and restructuring of the MRC, NSCI, and MCC technology platforms. We expect to achieve profitability in our battery material business this year by expanding sales, and our carbon products business is posting stable profits on cokes.
This year, we don’t know how the lifting of the zero-interest-rate policy will affect the U.S. economy, but personal consumption and housing investment are increasing steadily, and we forecast generally favorable economic conditions in the U.S. We anticipate stable growth in China and emerging markets and the depreciation of the yen is certain to fuel stronger expansion in Japan. So we see continued overall strength in the global economy. On the other hand, there are concerns about the year-end resolution at OPEC’s general meeting and other factors will affect crude oil prices. But we anticipate a mild recovery in prices toward the end of 2016.
April brings the launch of MCHC’s new medium-term management plan, APTSIS 20. The keys to achieving our targets are, first, maintain safe and stable operation, which is the foundation of stable profits; second, move ahead with our fixed-cost reduction plan to survive the changing business climate; third, promote structural reform in the petrochemical business, particularly the derivative and polyolefin fields; and fourth, achieve results in the “new energy” businesses of lithium-ion battery materials, optoelectronics materials (phosphors, and GaN), and OPV as quickly as possible.
In April 2017, our company will be integrated with MPI and MRC. But the direction of our business will never change. I hope all employees can exercise their full potential to maximize the power of this new consolidated company from the very start.
Let’s make fiscal 2016, our final year as MCC, the greatest year ever, launching our new integrated company on a high note.
For further information, please contact:
Public Relations and Investor Relations Office
Mitsubishi Chemical Holdings Corporation
Tel: [+81] (0)3-6748-7140
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