Asahi Kasei Closes Thailand Factory! Merck Transfers German PC Plant, Market Turmoil!

Asahi Kasei decided to close its plant in Thailand. On November 15, Asahi Kasei announced that its general meeting of shareholders has made a resolution to terminate the operations of its subsidiary PTT Asahi Chemical Co., Ltd (PTTAC) and plans to dismantle the related plant facilities. The plant is expected to cease production on October 31, 2024 and cease sales on December 31, 2024, while the demolition of the plant facility is expected to be completed between 2025 and 2028.

PTTAC was established in 2006 as a 50-50 joint venture between Asahi Kasei and PTT Global Chemical Public Company Limited (PTTGC). It is mainly responsible for the production and sales of acrylonitrile (AN) produced by propane process, methyl methacrylate (MMA) produced by ACH process and ammonium sulfate, mainly for the Southeast Asian market.

The main reason for the closure is that since 2022, the company's market competitiveness has decreased due to the continued downturn in the economic environment and the rise in raw material costs. In addition, due to the deterioration of supply and demand balance caused by the increase of production capacity in China, the profitability has been adversely affected, and Asahi Kasei and PTTGC believe that PTTAC's operations are difficult to continue to improve.

Acrylonitrile is mainly used in the production of polyacrylonitrile fiber (acrylic fiber), ABS resin, nitrile rubber, adiponitrile and acrylamide and other products.The main production enterprises include Sierbang, Shanghai Secco, Zhejiang Petrochemical, Anqing Petrochemical, Jilin Petrochemical, Lihua Yi, Liaoning Jinfa, Korul, China Sea Petrochemical and so on.

Methyl methacrylate is mainly used in the production of plexiglass (PMMA), methyl methacrylate - styrene-butadiene copolymer (MBS), polyvinyl chloride additives (ACR) and so on. According to third-party data, China's production capacity has increased sharply in recent years, with an annual production capacity of 1.92 million tons in 2023. The main production enterprises include Chongqing Yixiang Chemical, Sierbang, Jilin Petrochemical, Qixiang Tengda, Zhejiang Petrochemical, Jiangsu Jiankun Chemical, Wanhua Chemical and so on.

Trinseo announced the transfer of its plant in Stad, Germany. On November 13, Sunshineo agreed to transfer its polycarbonate (PC) technology license and all proprietary PC production equipment to a wholly-owned subsidiary of Deepak Nitrite Corporation for use in India. The total value of the agreement is $52.5 million.

With a PC production capacity of 160,000 tons/year at its plant in Stad, Germany, Siegio is the world's second largest PC producer, with a global production capacity of about 5% of the world's total. After being spun off from Dow Chemical in 2010, the company went public in 2014 and focuses on polymer products, latex and specialty materials.

The company announced in October that it plans to permanently close its PC production line in Stad, Germany, in January 2025 and plans to use external suppliers to meet its PC needs. As early as 2019, the company evaluated the plant due to weak market demand and intense competition, but ultimately chose to retain the plant given the supply of PCS to the downstream composite business.

According to data, the global PC production capacity of more than 5.4 million tons, of which China's production capacity (including foreign investment in China's equipment) more than 3.3 million tons, accounting for about 62% of the global total capacity, is China to become the largest PC producer. In the past few years, China's PC production capacity has shown rapid growth, with an average annual growth rate of more than 23%, and has fully participated in the market competition, which may be one of the reasons why Shengxiao decided to exit the PC market.

Deepak Nitrite Corporation announced in February 2024 that its subsidiary Deepak Chem Tech Ltd. A Memorandum of understanding (MOU) has been signed with the Indian state of Gujarat for the planned investment of INR 90 billion (about $1 billion) in Dhah, India for the construction of several projects including PC resins and composites as well as methyl methacrylate (MMA) and aniline production plants, which are expected to start operations by the end of 2027.

In May 2024, Deepak Nitrite acquired OXOC Chemicals Ltd., an Indian manufacturer of PC composites, and is building a PC composites plant with an annual capacity of 30,000 tons.