MOSCOW (MRC) -- Tosoh reports an 8.4% decline in sales for the company's fiscal nine months, which ended on 31 December, to Yen 591.8 billion (USD5.45 billion), according to Chemweek.
The fall is attributed to lower sales prices, the result mostly of a decline in the price of naphtha and worsening conditions in overseas markets, it says. Net income was Yen 46.2 billion, down 18% year on year (YOY), while operating income fell 17.3% YOY to Yen 65.8 billion.
Sales for the company’s petrochemical segment decreased 13.5% YOY to Yen 125.1 billion, with operating income declining 24.9% to Yen 9.2 billion. Shipments of ethylene, propylene, and cumene rose in line with an increase in production volumes due to no plant maintenance being scheduled for the fiscal year, says Tosoh. Product prices, however, were down because of the decline in naphtha prices and worsening overseas trade conditions, it says.
Exports of polyethylene resin for use in photovoltaic cell encapsulating films increased and product prices fell, reflecting the lower naphtha prices. Chloroprene rubber exports, primarily to Asia, also declined, according to the company.
Tosoh's chlor-alkali segment saw operating income fall 33.2% YOY to Yen 21.8 billion, with sales down 12% YOY to Yen 223.7 billion. Stagnation in domestic demand led to a decrease in caustic soda shipments in the domestic market, it says. Additionally, caustic soda export prices declined in line with worsening market conditions overseas. Shipments of vinyl chloride monomer fell because of a drop in production and declining market conditions overseas led to a reduction in product prices. Rising polyvinyl chloride resin production volume resulted in increased shipments, while prices fell for methylene di-para-phenylene isocyanate, says the company.
Operating income at Tosoh's specialty segment decreased 20.4% YOY to Yen 15.4 billion, while sales of specialty products dropped 5.7% YOY to Yen 139.5 billion. Ethyleneamine shipments declined owing to stagnant demand, with poor trade conditions impacting ethyleneamine prices. Shipments mostly to Europe of packing materials for liquid chromatography decreased. Diagnostic-related product shipments, especially of in vitro diagnostic reagents bound for Europe, the US and China also fell. The company adds that shipments of silica glass reduced amid inactivity in the semiconductor market. Shipments of electrolytic manganese dioxide for dry cells also decreased.
The company’s other business unit is engineering.
Tosoh has maintained its forecast for the fiscal year ending 31 March 2020. The company expects its full-year net profit to be Yen 57 billion, while its guidance for operating income stands at ?84 billion. Full-year net sales are projected to be Yen 800 billion.
As MRC wrote previously, Tosoh Corp restarted its 527,000 tpa naphtha cracker in Yokkaichi, central Japan in mid-April 2016, after planned maintenance. The cracker was shut on March 8, 2016. The company runs two low-density polyethylene (LDPE) lines with a combined production capacity of 56,000 mt/year and a 43,000 mt/year LDPE/ ethyl vinyl acetate (EVA) swing plant at the same site. It also runs 120,000 mt/year high density polyethylene (HDPE) plant.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh's petrochemical operations supply ethylene, polymers, and polyethylene.