MCNS Growth Plans
SKC-Mitsui Chemicals JV aims to double sales to $1.9 bn by 2020
Polyurethane chemicals maker Mitsui Chemicals & SKC Polyurethanes Inc. (MCNS), a joint venture of South Korea’s SKC Co. and Japan’s Mitsui Chemicals Inc., is considering capacity expansion to double its sales to 2 trillion won ($1.86 billion) by 2020 thanks to burgeoning demand for its products.
MCNS said on Tuesday its operating profit this year is expected to more than double to 76 billion won on sales of 1.1 trillion won from a year ago. Buoyed by stellar performance, the company has set a goal to up annual sales to 2 trillion won by 2020 and is reviewing a plan to add production lines in Korea and Japan.
As part of its expansion plans, it also plans to double the number of polyurethane production site from current 10 and upgrade five of them into a smart factory that would be run by artificial intelligence technologies.
The Korea-Japan joint venture that was set up by Korea’s major petrochemical company SKC and Japan’s Mitsui Chemicals in 2015 has seen a rapid growth in sales and profit thanks to synergy created by combining mainstay product lineups of the two companies.
Before the inception of the joint venture, SKC had churned out only polyol and propylene oxide, raw materials for polyurethanes, but no isocyanate. Mitsui Chemicals, on the contrary, had produced polyol and isocyanate but no propylene oxide. With the creation of the JV, the two leading petrochemical companies from Korea and Japan have become available to produce all three core raw materials for polyurethanes and respond promptly to the fast changing demand in the global chemicals market.
Market analysts see the joint venture has been a great win-win partnership between the two companies that has allowed them to accomplish vertical and horizontal integration in their production lines.
By Kang Doo-soon and Lee Ha-yeon