MOSCOW (MRC) -- Mitsubishi Chemical Holdings plans to merge its three wholly owned chemical subsidiaries in April 2017 to allow for more efficient distribution of management resources, said Asia.nikkei.
An official decision to combine Mitsubishi Chemical, Mitsubishi Plastics and Mitsubishi Rayon is expected at a board of directors meeting to be held that day. The three subsidiaries together generated roughly 3 trillion yen (USD24.15 billion) in sales in the year ended March 31.
Plans call for Mitsubishi Rayon to absorb its two sister companies. Details such as the merged entity's name and president will be decided later.
Mitsubishi Chemical Holdings had said July 16 that it would consider integrating its three chemical units and make a final decision by the end of the fiscal year.
Under a five-year business plan through fiscal 2020, Mitsubishi Chemical Holdings aims to boost return on equity to the 10% level, up from the 6% level for fiscal 2014. Though the company is the industry leader in sales in Japan, it is no match for U.S. and European chemical giants in terms of scale or profitability. By consolidating operations and streamlining back-office segments, the company looks to distribute resources more efficiently. The reorganization will make it easier for the company to assign personnel in growth fields such as automobiles and health care.
Overseas markets account for roughly 45% of Mitsubishi Chemical Holdings' sales. The company hopes to raise this figure by strengthening its development and marketing.
As MRC informed earlier, Mitsubishi Polyester Film, Inc. announced an investment of USD100 million to increase its capacity for biaxially oriented polyester (BOPET) film at its plant in Greer, SC. The investment will include a new film production line scheduled to start up mid-year 2017.
Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.