Mitsubishi to build US resin processing plant next to new Dow Chemical cracker

The Japanese company plans to set up an acrylic resin-processing plant next to one of the world's largest ethylene plants the US company is set to build in Texas. The two companies aim to use the cheaper, new natural gas to mass-produce value-added chemical products.

North America is thought to have rich deposits of shale gas. Some estimates show that producing ethylene from North American shale gas cost only one-twentieth of that of production at chemical plants in Japan. Major global petrochemical companies are moving to build plants in the US, signalling that price competition for resin products may further intensify.

Dow Chemical plans to spend about 330 billion yen to build a huge plant that uses shale gas to produce 1.5 million tpy of ethylene in the Texas city of Freeport.

The company is looking to start operating the plant in 2017. Mitsubishi Chemical, meanwhile, will set up its own plant that will use lower-priced ethylene supplied by Dow Chemical. The two companies will cooperate in creating this new industrial complex.

Mitsubishi Chemical will spend about 50-60 billion yen to build its new plant, which will be capable of producing 250,000 million tpy of acrylic resin materials, making it one of the largest in the world.

Acrylic resin has properties such as high transparency, and is used in liquid display panels, auto lamps as well as construction materials.

The market for acrylic resin, including its raw materials, is valued at around 1 trillion yen globally. Demand will likely expand for the material in emerging countries in Central and South America, Asia and Africa.