Zeon to discontinue 60% of rubber production at Japanese facility
13 Jun 2024
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Remaining 40% of production to focus on ‘highly profitable synthetic rubber groups'
Tokyo – Zeon Corp. is planning to discontinue 60% of synthetic rubber production at its manufacturing facility in Tokuyama, Shunan city, Japan.
The decision will see the group halting the production of emulsion styrene butadiene rubber series 1 (EBSR 1) and acrylonitrile butadiene rubber (NBR) latex by end of fiscal 2026, ending March 2027.
Butadiene rubber production will be discontinued after fiscal 2028, Zeon announced as part of its new mid-term management plant 11 June.
The remaining 40% of production will focus on ‘highly profitable’ rubbers, including solution styrene butadiene rubber, ESBR 2 and NBR, Zeon noted.
The ‘portfolio restructuring’ will also see the group investing Yen70 billion (€415 million) in a new production facility for cyclo olefin polymers (COP) at the Tokuyama facility, with a production capacity of 12 kilotonnes per annum (ktpa).
The portfolio restructuring, said Zeon, would generate ‘more profits than if elastomer business continued’ at the site.
The Tokyo-based group noted that its return on invested capital will see a ‘temporary’ dip due the a 60% production cut in Tokuyama and the COP investment.
However, the group expects a “V-shaped” recovery towards fiscal year 2030, through to 2035.
Elsewhere, Zeon said it would ‘polish up’ existing businesses within its ‘chemicals’ division.
Here, it noted that the isoprene rubber and SIS elastomers, as well as piperylene-based resins (PDR) were among the ‘low-profit’ products.
“Profitability of the chemicals business (PDR and SIS) declined due to an entry of overseas competitors,” Zeon said in its presentation.
However, the group went to add that the chemicals division was an important component of the C5-related operations and it was “essential” to continue the business.
To avoid overseas competition, Zeon said it aimed at securing competitive advantage in Japan and North America, through lower tariffs and stronger customer relationships.
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