Sumitomo Chemical Implements Major Layoffs in Asia, with MMA Monomer Production Capacity Slashed by 80%, Causing Severe Impact on PMMA Market!

Sumitomo Chemical Co., LTD., a well-known Japanese chemical company, recently announced that it will close two of the three main production lines of its wholly owned subsidiary Sumitomo Chemical Asia Pte. LTD. (hereinafter referred to as "Sumitomo Chemical Asia") in Singapore by the end of September 2024. The two production lines are responsible for the production of methyl methacrylate (MMA) monomer and polymethyl methacrylate (PMMA), respectively. This decision will result in a reduction in MMA monomer capacity of approximately 80% and PMMA capacity of approximately 70% in the region.

Polymethyl methacrylate (PMMA) is a plastic material that is widely used in many fields and is widely popular for its excellent transparency, weather resistance and aesthetic luster. PMMA is widely used in automotive taillights, sign plates, aquarium tanks and optical components of liquid crystal displays. Polymethyl methacrylate monomer is used as an important raw material for the production of polymethyl methacrylate and coating materials.

Although the MMA monomer and PMMA markets have recently shown signs of recovery after a period of significant slowdown, the capacity of these products is expected to continue to grow, especially in the Asian region. Against this market backdrop, Sumitomo Chemical Group has thoughtfully concluded that it is difficult to ensure stable sales volumes and profit margins in the medium to long term, especially in the general-grade product segment. As a result, the company decided to focus on specialty and high value-added PMMA products after the closure of the two production lines, leveraging its technological advantages to transform the business structure into one that is stable and adaptable to market changes.

In addition to accelerating the transformation of its existing product portfolio and production systems, Sumitomo Chemical has also made significant adjustments in its petrochemical business and directed its resources to create value through technologies that reduce environmental impact. For PMMA, the company completed a pilot facility for chemical recycling of plastics at its Ehime plant in Japan in December 2022 and is currently conducting technical validation and marketing activities for the technology with a view to implementing chemical recycling technology in society as soon as possible. In May 2024, the company also signed a collaboration agreement with Lummus Technology, a major U.S. technology licensor, for the licensing and commercialization of chemical recycling technology. Going forward, the company will further strengthen its offering of MMA-related solutions.

Sumitomo Chemical is implementing short-term intensive performance improvement measures and, as part of these efforts, is accelerating its business restructuring from the perspective of profitability and the best owner principle. The company will steadily advance these measures to ensure a V-shaped recovery in fiscal 2024, while making fundamental structural changes.