Sumitomo Chemical to end SSBR production in Singapore, ‘exit EPDM’

Tokyo – Sumitomo Chemical has launched a major rationalisation programme to double core operating income over the next two years.

As part of the move, the group is ending the production of styrene solution butadiene rubber (SSBR) at its manufacturing plant in Singapore, Sumitomo Chemical announced 15 May.

In addition, the group is completing its ‘exit’ from the EPDM segment, it said in its fiscal 2022 presentation.

The programme will also see the Tokyo-based group withdrawing from caprolactam, dyestuffs and chemical fertilisers segments while reviewing display materials operations for optimisation of production.

The measures are part of the group's ambition to achieve a core operating income of Yen200 billion (€1.3 billion) in two years.

The Tokyo-based supplier reported a core operating income of Yen92 billion during the year ended 31 March.

For the next fiscal year, however, Sumitomo Chemical expects the figure to more than halve to Yen40 billion.

The exit from the above markets are estimated to generate Yen25 billion by the end of fiscal 2024, ending March 2025.

Other measures to reduce costs and improve earnings, said the group, include lowering manufacturing costs by purchasing low-priced raw materials and improving yields.

The group is also aiming to reduce general expenses and enhance work efficiency through use of digitalisation.

In operation since 2014, Sumitomo Chemical’s SSBR plant in Singapore has a capacity to produce 40 kilotonnes of the synthetic rubber materials per annum.

As for EPDM, Sumitomo Chemical announced in 2021 that it aimed to discontinue the production of the elastomer materials in Chiba, Japan by the end of March this year.

At the time of the announcement, the group said it had been working to increase the added value of its products and reduce manufacturing costs to strengthen the competitiveness of the business.

However, it said, the maintenance and repair costs of the 50-year-old production facility “is increasing year after year.”

Sumitomo Chemical has the capacity to manufacture 40 kilotonnes per annum (ktpa) of EPDM at the Chiba factory, under the brand Esprene.

In addition, it has a 50% share in the Petro Rabigh joint venture with Saudi Aramco, which manufactures 75ktpa of EPDM in Saudi Arabia.

The group’s 15 May presentation did not provide any details on whether or not the exit will include the Petro Rabigh partnership.