Mitsubishi Chemical Corporation, a subsidiary of the Mitsubishi Chemical Group, announced its decision to terminate plans for constructing a new MMA (methyl methacrylate) monomer plant in Geismar, Louisiana, USA. This project, initially revealed on December 9, 2020, aimed to utilize the Group’s proprietary "New Ethylene Process (Alpha Process)" technology. However, after careful evaluation, the Group resolved to discontinue the investment plan.

Reasons for Discontinuation

MMA monomer is a key raw material for acrylic resins used in various applications, including automobile lamp covers, signboards, aquarium tanks, paints, and building materials. Global demand for MMA exceeds three million tons annually, with steady market growth expected.

The Group had undertaken significant preparatory steps for the project, including acquiring a construction site in Geismar, conducting front-end engineering design, and securing regulatory permits. The plant was designed to use ethylene derived from U.S. shale gas and implement the Group’s innovative Alpha Method technology.

However, the decision to abandon the project was influenced by two primary factors. First, the Group determined that current demand could be met using existing MMA production facilities in Tennessee and other locations. Second, negotiations with customers for long-term contracts failed to yield commitments, partly due to increased capital investment costs driven by inflation and other economic challenges.

Strategic Focus and Future Plans

Despite discontinuing this specific project, the Group remains committed to strengthening its MMA business. It will focus on optimizing its global production network by establishing new sites, consolidating existing ones, and enhancing competitiveness. Additionally, the Group plans to prioritize high value-added applications and explore new uses for MMA, aligning with its "New Medium-Term Management Plan 2029," unveiled on November 13, 2024.

Financial Impact

The decision to discontinue the project is expected to result in a loss of approximately 20 billion yen during the third quarter of the fiscal year ending March 31, 2025. This loss stems from impairment expenses related to the investment plan. The Group is currently assessing the full financial impact and will provide further updates if revisions to the consolidated earnings forecast become necessary.

By focusing on optimizing existing assets and pursuing innovative growth strategies, the Mitsubishi Chemical Group aims to adapt to market dynamics while maintaining its competitive edge in the MMA industry.

Mitsubishi Chemical Group Corporation, headquartered in Tokyo, Japan, was established in October 2005 through the merger of Mitsubishi Chemical Corporation and Mitsubishi Pharma Corporation. It is a key member of the Mitsubishi group of companies.