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Sumitomo Chemical and Asahi Glass put prodcuction on hold

12 November 1998: Japan“s Sumitomo Chemical Co. and Asahi Glass Co. have decided to keep production facilities at Chiba VCM Co. inactive for the time being, according to a recent press report.
Init…

12 November 1998: Japan“s Sumitomo Chemical Co. and Asahi Glass Co. have decided to keep production facilities at Chiba VCM Co. inactive for the time being, according to a recent press report. Initially, the partners had intended to restart production in November, following the completion of scheduled maintenance. But considering the frosty demand climate for polyvinyl chloride (PVC) resin, the companies decided to extend the shutdown until next January. During this period, Asahi Glass will shift vinyl chloride monomer (VCM) production to Keiyo Monomer and supply the output to Shin Dai-Ichi Vinyl Corp., another joint firm in which Sumitomo Chemical is a capital participant. Both Sumitomo Chemical and Asahi Glass said they are not planning on changing their joint operation format for Chiba VCM. But the withdrawal of capital by another original member, Denki Kagaku Kogyo K.K., has forced the two remaining partners to lower the capacity utilization rate, making it extremely difficult to continue the business, the report said. Production facilities for Chiba VCM are located at Sumitomo Chemical“s Chiba factory. Output capacity is roughly 210,000 tonnes per year. Since Denki Kagaku switched its VCM supply source to Tosoh Corp. starting last October, Sumitomo Chemical and Asahi Glass essentially have been running the operation by themselves, for about a year. The loss of Denki Kagaku as a VCM off-taker has had the effect of lowering Chiba VCM“s output to about 140,000 tonees per year, and the two remaining partners have been struggling to cope with the situation through such means as converting to a manufacturing process capable of handling lower operating rates.

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