Thanks to booming demand and higher selling prices, the Chemicals & Plastics segment of Japanese chemical producer UBE Industries (Tokyo; www.ube.com) led the overall performance in fiscal 2011 (31 March) and increased its share of group revenue to about a third, from 30% in fiscal 2010. With sales of polyamide, caprolactam and polybutadiene rubber up 24% to JPY 204.5 bn (EUR 1.8 bn), the segment’s operating profit quadrupled to JPY 20 bn from JPY 15.2 bn. In particular, the spread between selling prices for caprolactam and the cost of the PA feedstock’s production widened “substantially.”

In the Specialty Chemicals & Products segment, shipments of polyimide products used in films for flat screen televisions and gas separation recovered, and UBE said both exceeded last year’s volumes. The segment’s sales rose nearly 14% to JPY 68.7 bn, and operating profit increased to JPY 8.7 bn from JPY 3.2 bn. UBE group sales widened by 12% to JPY 616 bn and operating profit by 61% to JPY 44.3 bn. In its earnings forecast for the current fiscal year, UBE said it expects the global economy to remain on track to recovery.

While the Japanese economy has shown some signs of recovery, the chemical producer said there is concern that the earthquake and the subsequent nuclear power problems may limit electrical power distribution, delay restoration of supply chains and create “confusion in logistics” – see Plasteurope.com of 18.03.2011. Due especially to anticipated higher selling prices and higher sales volumes in Chemicals & Plastics as well as Energy & Environment, sales revenue is forecast to reach JPY 650 bn, with operating income could remain flat at JPY 44 bn. For Chemicals & Plastics, sales improvement of 10.5% to JPY 226 bn is predicted, with segmental operating profit seen as falling by 7.5% to JPY 1.5 bn. UBE said it may have to adjust the forecast if the earthquake-related impact on business is greater than expected.