Consolidating ethylene at Ukishima and declaring “Beyond Petrochemicals” (1985)

The decision to put out the fire

At the heart of this decision was the choice to extinguish ethylene production at the birthplace of Japanese petrochemicals and to move the centre of the business away from competing on volume in commodity chemicals toward earning from specialty products and functional materials. What is visible here — riding the state-led framework of the Structural Improvement Law while reaching again and again for the joint-venture form in the work of restructuring, through Ukishima Petrochemical, Mitsui Nisseki Polymer, the foreign joint ventures and later Grand Polymer — is the undercurrent of a decision-making style that begins with the pooled subscription of 1955. That the decision to cut capacity and the declaration of a direction were laid over one another in the same year is what gives this turning point its outline.

Yet it took a long time for the words “Beyond Petrochemicals” to acquire substance. Dependence on commodity petrochemicals survived the 1997 merger with Mitsui Toatsu Chemicals and surfaced again in the early 2010s as three consecutive years of net loss. The 1985 declaration was at once the starting gun for an escape and the beginning of a question that three further decades would not fully answer. Looked at from today, with ethylene restructuring once more an industry issue, the weight of that decision to put out the fire at the birthplace stands out all the more sharply.