Mitsui Chemicals - Company History

Mitsui Chemicals descends from three companies, all of them rooted in Mitsui Mining. Toyo Koatsu Industries was incorporated in April 1933 with capital of ¥20 million to make ammonium sulfate at Omuta in Fukuoka, extending a move into nitrogen chemistry that Mitsui Mining had begun in 1928 by taking over a Claude-process venture. Mitsui Chemical Industries followed in April 1941, when Mitsui Mining hived off its chemicals division and its Meguro laboratory with capital of ¥80 million — a business whose real origin was the coke works the Miike colliery had opened at Omuta in 1892. Fertilizer and coal chemistry, in other words, were already established in Kyushu long before petroleum entered the picture.

The third line was different in kind. In July 1955, seven Mitsui-group companies and Koa Oil jointly founded Mitsui Petrochemical Industries in answer to MITI’s policy of building a domestic petrochemical industry. The joint subscription was not a preference but a necessity: no Japanese chemical company of the day had the capital to attempt world-scale petrochemicals by itself. From 1956 the venture bought roughly 320,000 m² of a former Imperial Army fuel depot at Iwakuni in Yamaguchi, and in February 1958 the site came on stream with 20,000 tonnes a year of ethylene and its derivative plants — one of the first ethylene-centred complexes in Japan.

Iwakuni set two patterns at once. It pulled polyethylene and polypropylene production and a ring of derivative makers into western Japan, prefiguring the Setouchi complex; and it established that Mitsui would build through pooled capital rather than alone. The company listed on the second sections of the Tokyo and Osaka exchanges in 1962 and moved to the first section in 1965. The co-investment habit formed here would resurface, for the next seventy years, in every foreign joint venture, every capacity cut and every merger the company undertook.

Demand was in the Kanto region, and on Mitsui Bussan’s recommendation the company took land on the reclaimed Goi-Anesaki waterfront in Chiba, contracting for roughly 3.3 million m² with the prefecture in 1961 alongside Toyo Rayon and other Mitsui firms. The Chiba works started up in March 1967 with 120,000 tonnes a year of ethylene — the largest plant in Japan and among the largest anywhere at the time. With fertilizer at Omuta, dyes and pharmaceuticals from the old Mitsui Chemical Industries, and basic chemicals now at both Chiba and Iwakuni-Otake, the group settled into a three-site, east-and-west structure that no domestic rival could match on scale.

What followed was an arms race: nine new ethylene crackers were built in Japan between 1969 and 1972. Mitsui declined to join it alone. In November 1967 it set up Ukishima Petrochemical as a fifty-fifty venture with Nippon Petrochemicals and expanded through that vehicle instead — the 1955 formula applied to growth, buying scale while halving the exposure to overcapacity.

The two oil shocks and the shift to floating exchange rates then turned that overcapacity into the industry’s central problem. In 1983 Mitsui joined Mitsui Toatsu Chemicals, Nippon Petrochemicals and Mitsui-DuPont Polychemicals in forming Mitsui Nisseki Polymer, bringing itself inside the state-run disposal framework of the Structural Improvement Law. Over 1984 and 1985 it scrapped 87,000 tonnes of ethylene capacity at Iwakuni-Otake and 143,000 tonnes at Chiba. The joint venture built to expand had become the vehicle for shrinking.

In March 1985 all of the company’s ethylene production was consolidated into Ukishima, and the flame went out at Iwakuni-Otake — the birthplace of Japanese petrochemicals. Chiba was redefined as the basic-chemicals site and Iwakuni-Otake as the centre for specialty products. That October the company published a medium-term vision it called “Beyond Petrochemicals”: diversification, higher value added, internationalization. The proprietary polyolefin catalyst developed in 1976 was turned into a licensing business, with more than 140 licences granted by 1995, and a chain of new laboratories — polymer applications, biotechnology, functional materials, the Sodegaura development centre — was built to feed the shift.

Between 1981 and 1991 the company also opened a run of joint ventures with foreign partners in functional materials: Nippon Amorphous Metals with Allied, Japan GE Plastics with GE, Mitsui-DuPont Fluorochemicals, Nippon Alkylphenol with Ciba-Geigy, Mitex with EniChem. The division of labour was consistent — the Japanese side supplied plants and distribution, the foreign side catalysts, materials design and product specifications — and it widened the specialty portfolio without a matching investment burden. It was the 1955 formula again, this time applied to foreign technology.

The 1994 merger of Mitsubishi Kasei and Mitsubishi Petrochemical into Japan’s largest chemical company was the trigger for the next move. Mitsui set up Grand Polymer with Ube Industries in October 1995 to secure a bargaining position, agreed terms with Mitsui Toatsu Chemicals in 1996, and in October 1997 the two merged as equals to form Mitsui Chemicals — at a ratio of 0.6 to 1.0 in the petrochemical side’s favour, so that the “equal” merger was in substance led by petrochemicals. The combined company carried 48 businesses; a 1998 plan cut the focus to 17. An announced integration with Sumitomo Chemical in December 2000 was abandoned in March 2003 after three years of deadlock over portfolios and control, and Mitsui turned instead to piecemeal deals — Prime Polymer with Idemitsu Kosan in 2005, and bolt-on purchases in polyurethanes (2001), agrochemicals (2007) and photochromic lens materials (2008) that would later become the basis of its life-science business.

After the financial crisis the old problem returned in a new form. Mitsui posted net losses for three consecutive years — ¥1.0 billion in the year to March 2012, ¥8.1 billion in 2013 and $237.2M (¥25bn) in 2014 — as Chinese capacity additions and structurally low cracker utilization pushed commodity earnings down. It was, in outline, the 1980s over again: the petrochemical business begun with pooled Mitsui capital in 1955 was still, half a century on, the main source of earnings volatility. Tanaka Toshikazu, president from June 2009, began the response by running the Chiba crackers jointly with Idemitsu Kosan and by consolidating the non-petrochemical businesses into Mitsui Chemicals Agro and Mitsui Chemicals Tohcello.

Tannowa Tsutomu, president from June 2014, made the shift explicit: keep rationalizing commodity petrochemicals, and concentrate capital on three growth domains — life and healthcare, mobility, ICT. Photochromic lens materials were bought from Corning in 2014 and the Kulzer dental materials business from Heraeus in January 2018, giving the company an oral-care pillar of global scale. Operating profit rose from $396.8M (¥42bn) in the year to March 2014 to $910.3M (¥102bn) in 2017 and ¥103.4 billion in 2018. Thirty years after the “Beyond Petrochemicals” slogan, the escape from commodity dependence had finally become a matter of capital allocation rather than rhetoric.

Hashimoto Osamu, president from June 2019, extended it into an explicitly two-axis company, running petrochemicals and the growth domains on different logics: ARRK and Honshu Chemical brought in during 2021, a polyurethane venture stake taken from SKC, agrochemicals bought from Meiji Holdings in January 2022. In 2025, with Ichimura Satoshi as president and Yoshida Osamu as chief financial officer, the emphasis moved again — from adding acquisitions to disciplining the capital already deployed. ROE and ROIC were put first, a planned dividend increase was converted into a share buyback, policy shareholdings held in the retirement benefit trust were sold, and the company committed to returning some $1.0B (¥150bn) to shareholders over four years. The joint cracker consolidation with Idemitsu, meanwhile, is set for fiscal 2027.