Sumitomo Chemical to Exit Caprolactam Business

Recently, Sumitomo Chemical announced that the company will decommission its 85,000-ton/year caprolactam production facility in Niihama, Ehime Prefecture in October 2022. Sumitomo Chemical started the production of caprolactam in 1965 using the liquid phase method in Niihama City. In 2015, as global capacity grew, mainly due to massive capacity expansion in China, the company closed its liquid-phase process line to focus on a gas-phase process line that does not produce ammonium sulfate as a by-product. During these years, although the company continued to pursue technological improvements and cost reductions, it was still difficult to achieve sustainable competitiveness and decided to exit the caprolactam business.

S&P Global Commodities Insights' Chemical Economics Handbook shows that Japan, once a major caprolactam producer in Asia, has grown its production capacity at 6 per year since 2015 due to weak global demand, a shift in capacity to other Asian producers and a loss of overall competitiveness. % above the speed drop. Manufacturers that have withdrawn or reduced production capacity include Mitsubishi Chemical, Ube and others. In 2015, Sumitomo Chemical closed its larger 95,000-ton/year unit. Sumitomo Chemical also said it will continue to produce cyclohexanone, an intermediate material for caprolactam, as the business environment for the product is expected to remain stable.

The company added that while caprolactam production will be discontinued, operations at its Niihama plant will continue and respond to market demand. After expanding production capacity for the feed additive methionine in 2018, the company has started building plants for high-purity chemicals for semiconductors and liquid crystal polymers. At the same time, the company will also build a pilot facility for chemical recycling of acrylic resins. According to the company's business plan for fiscal 2022-2024, the company intends to improve profitability through technology-driven operations.