Chlor-alkali Group

 

“By strengthening the business foundation and increasing cost-competitiveness, we aim to establish a revenue base that is resistant to market fluctuations.”

  • Message from the Group President

    As a supplier of commodity products, the Chlor-alkali Group is expected to ensure a stable supply of high-quality products for use internally, within Tosoh, and externally, by wide-ranging customers. We must keep pace with growth markets by increasing the scale of our business and by enhancing its cost-competitiveness.

    We will strengthen the foundation of our chlor-alkali business and consider increasing our chlor-alkali production capacity. Our urethane business, meanwhile, will see us promote added-value products to build a revenue base less susceptible to influence from fluctuations in the market than commodity products.

    We must, moreover, develop markets overseas to expand our business and increase its profits. The role of the management team is to develop a framework within which employees can gather various experiences from the early stages of their careers to cultivate personnel suited to handle business operations in the future.

    Shingo Tsutsumi
    President, Chlor-alkali Group
    Director, Executive Vice President
    Tosoh Corporation

  • Snapshot

    Chlor-alkali

    We produce our caustic soda and chlorine at Asia’s largest electrolysis facility.

    Urethanes

    We manufacture a wide range of polyurethane raw materials used in automobiles, home electronics and homes in general, and industrial materials.

    Cement

    In manufacturing cement, we recycle a variety of materials as raw materials. These include waste plastic, automobile shredder residue (ASR), and construction waste soil.

    To learn more about the Chlor-alkali business group, click here

  • Results

    Fiscal Year 2019 Results

    Net-sales-CA-02-02-02.jpg            Operating-Income-CA-03-03-03.jpg

    The Chlor-alkali Group’s net sales rose ¥2.4 billion, or 0.7%, to ¥337.4 billion (US$3.0 billion) in fiscal 2019. Its operating income, however, fell ¥20.6 billion, or 31.0%, to ¥46.0 billion (US$415 million), primarily because of worsening trade conditions.

    Domestic and export shipments of caustic soda were strong. Although market conditions overseas worsened, export product prices decreased in tandem with increased domestic product prices. Vinyl chloride monomer (VCM) export shipments and prices increased, driven by improvements in VCM market conditions overseas. Shipments domestically and abroad of polyvinyl chloride (PVC) resin diminished as a result of lessened production volume, but PVC prices rose because of upward revisions to domestic PVC prices and improvements in overseas PVC markets.

    Domestic shipments of cement were strong, but cement exports decreased. Market conditions abroad likewise deteriorated for methylene diphenyl diisocyanate (MDI), such that MDI export prices decreased.

  • Forecast

    Fiscal Year 2020 Forecast

    Fiscal 2020 net sales for the Chlor-alkali Group are projected to be ¥324.3 billion, for a decline of ¥13.1 billion compared with fiscal 2019. Sales volumes for urethane raw materials are forecast to increase, but net sales are nonetheless expected to decline, primarily because of worsening market conditions overseas for urethane raw materials and PVC.

    Operating income is expected to drop to ¥36.5 billion, down ¥9.5 billion from fiscal 2019. Although shipments of urethane raw materials and PVC are thought to increase, earnings are forecast to decline and fixed costs to increase. This is attributable to deteriorating market conditions overseas, particularly for urethane raw materials.

  • Strategy

    Chlor-alkali

    ■ Business Strategy
    - Strengthen foundation, and consider capacity increases

    ■ Business Assumptions
    - Maintain only limited plans worldwide to increase production capacity for chlor-alkali
    - Expect the continuation of trend toward environmental regulations in China

    ■ Key Measures

    1. Optimize PVC manufacturing structure
    - Close Taiyo Vinyl Corporation’s factory in Osaka

    2. Strengthen profitability of caustic soda and chlorine derivatives
    - Renew facilities for calcium hypochlorite, and increase production efficiency at Tohoku Tosoh Chemical Co., Ltd.

    3. Increase efficiency of in-house power generation facilities and biomass co-firing Reduce CO2 emissions

    4. Consider capacity increases, including establishing overseas bases

    Urethanes

    ■ Business Strategy
    - Stabilize and expand profits through added value and diversification of customer base

    ■ Business Assumptions
    - Anticipate softened demand due to capacity increases by manufacturers overseas
    - Expect changes in Chinese environmental regulations to continue

    ■ Key Measures

    1. MDI
    - Expand sales of specialty MDI, such as modified MDI
    - Expand sales in growth markets, such as India and Southeast Asia
    - Expand the production of monomeric MDI
    - Increase capacity by debottlenecking manufacturing operations

    2. Functional Polyurethanes
    - Strengthen supply and sales structure for medical devices
    - Heighten the product differentiation of HDI derivatives, such as special curing agents

     

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