Chemical suppliers everywhere are suffering

Chemical suppliers everywhere are suffering. Demand for industrial raw materials is falling in every market around the world, because the blockade has shut down most economic activity.

But no country can feel this cruelty more than Japan, whose economic growth in recent years has been wiped out as fast as the coronavirus. This is because the virus comes at a time when Japan's chemical industry has reached a decade of real growth.

Historically, the industry has struggled for years. The Japanese chemical industry has not been able to make progress in the increasingly competitive market since the "lost ten years" of the Japanese economic bubble burst in the 90s of last century and the subsequent ten years of economic stagnation and an average annual economic growth rate of less than 1%.

Only recently has the Japanese chemical industry had a chance to reconsider its global position since the 2008 financial crisis caused the recession. Although Japan's overall economy remains stagnant, the awakening of the Asian tiger has provided a sufficient market for Japanese chemical suppliers in places such as China and South Korea.

These booming markets have enabled the Japanese chemical industry to cope with two major challenges.

In 2011, Professor Takeo kikkawa of Hitotsubashi University pointed out that "first, Japanese chemical suppliers lag behind top manufacturers in the United States and Europe in terms of commercial scale." This is in sharp contrast to the automotive and electronics industries, whose sales are comparable to, or even higher than, western manufacturers. If the chemical industry wants to become the leading industry, it must successfully expand the scale of operation.

Second, kikkawa points out that the chemical industry has lost its manufacturing advantage, just as its manufacturing industry has lost its territory. "There is no doubt that the Japanese chemical industry has honed its competitive advantage through a detailed 'back and forth' process with assembly manufacturers," he said Recently, however, the international competitiveness of Japanese assembly manufacturers themselves has been declining... "

After Europe took the lead in finding profits from base chemicals, a new plan was born. As Yoshikawa wrote, "..." Obviously, the basic strategy of Japanese chemical manufacturers is to transform to high value-added products. "

This strategy has inspired some companies to become leading suppliers of industrial chemicals. Today, sinyue chemical has become the world's largest supplier of PVC, and occupies an important position in the field of polysilicon and silicone. Asahi has become the second largest supplier of acrylonitrile. Other well-known Japanese chemical companies include Sumitomo chemical, which employs 32000 employees in agricultural chemicals, polymers, electronics chemicals and petrochemicals. The company has 20000 employees, producing inks, pigments, coatings, polymers, fluorochemicals and adhesives. Kuraray, which produces resins, fibers and a variety of other industrial chemicals, and Mitsubishi Chemical Holdings, a multinational company with more than 50000 employees and a net worth of more than $10 billion.

The recovery of the chemical industry was also reported in the chemical industry magazine chemical weekly. "Japanese chemical manufacturers are getting out of the doldrums," he said in 2018. Strong global demand (including moderate domestic growth) and strong Petrochemical profitability improved performance. Producers continue to reduce their focus on essential chemicals and focus on higher value areas such as agriculture, electronics, healthcare, mobile and specialty materials. "

Article source: https://article-realm.com/article/Finance/7995-Chemical-suppliers-everywhere-are-suffering.html