The economic slowdown in Europe and other international markets, coupled with a widening gap between production costs and selling prices, has pressured in particular the plastics activities of Japan’s Ube Industries (Tokyo; www.ube.com) in fiscal 2013 (31 March). Overall sales declined by 2% to JPY 626 bn (EUR 4.8 bn) and operating profit by 35% to JPY 29.9 bn.

In the Japanese company's Chemicals & Plastics business segment, sales fell by 5% to JPY 219.3 bn as operating income plunged by 78% to JPY 5 bn. The group said the good performance of its PA businesses was unable to compensate for margin deterioration resulting from increased competition from a new caprolactam plant in China and the soaring cost of feedstock benzene. Slacker sales of polybutadiene rubber to China also had a negative effect.

Ube’s Specialty Chemicals & Products segment saw its sales revenue drop by almost 5% to JPY 61.1 bn and operating profit by 77.7% to JPY 1.2 bn. While demand for separators used in lithium-ion batteries picked up, business with polyimide products for films used in flat screen displays was sluggish, and sales of ceramic components for the solar industry were also weak.

For fiscal 2014, the Japanese chemical producer is targeting sales of JPY 675 bn, driven mainly by higher volumes in its two plastics-related segments, and expects operating profit to rise to JPY 34 bn. Sales from its Chemicals & Plastics business unit are expected to reach JPY 251 bn and sales of Specialty Chemicals & Products JPY 74 bn.

To improve its competitiveness in the polyamide market, the group plans to shutter an older caprolactam plant at Sakai / Japan – see Plasteurope.com of 13.02.2013 – while expanding capacity for PA 6 at Castellón / Spain from 22,000 t/y to an estimated 38,000-40,000 t/y – see Plasteurope.com of 30.03.2012.