Chemicals
The TonenGeneral Group is growing our unique and competitive Specialty Chemicals business while enhancing the competitiveness of the Basic Chemicals business through strong synergies with our oil refining operations.
Basic Strategy
Our Chemical segment is comprised of Basic Chemicals and Specialty Chemicals. The Basic Chemicals business is affected by a cyclical market, in which margins are driven by supply/demand imbalances over multi-year cycles. In order to mitigate the impacts from the down-cycle of the basic chemicals market, and to steadily increase profits in our Chemical segment, it is essential to maintain our competitive edge through differentiation of our products as well as enhancing the cost competitiveness of our Basic Chemicals business. The key to achieving this is a long-term approach to the growth of our Specialty Chemicals business, which is less impacted by cyclic market conditions.The TonenGeneral Group is working to generate stable profits under the following basic policies:
- Focusing on operating efficiency
- Assembling a unique business portfolio
- Conducting our operations, including in our oil segment, in an integrated manner
- Maintaining rigorous standards and investing in high-profitability projects
- Demonstrating leadership in technology
In particular, efficient integrated operations with our oil segment have achieved high synergy effects.
Our Basic Petrochemicals
Naphtha produced at oil refineries is the main feedstock for petrochemical production. It is a chemical with properties similar to raw gasoline. Naphtha is cracked (transformed in a process under steam and high temperature that breaks it down into smaller molecules) to produce basic chemical building blocks such as ethylene and propylene. These ethylene-type basic chemicals are commonly called “olefins”; our olefins are mainly produced at Kawasaki plant of Tonen Chemical Corp.
In a separate process, naphtha is passed through a reformer that converts the material's molecular structure to produce a material called “reformate,” which is usable both for motor gasoline and further processing. The stream of reformate used for chemicals is treated in a BTX unit to extract and separate chemicals such as benzene, toluene and xylene, a group of chemicals commonly called “aromatics.” After this extraction, the residual material from the BTX unit is returned to the refining pool to produce gasoline. Aromatics are mainly produced at Sakai and Wakayama refineries.
Our Specialty Chemicals
We continue to balance our portfolio with a focus on Specialty Chemicals products.Examples of Specialty Chemicals products are special solvents, adhesives and battery separator film (BSF) . In particular, we will adopt growth strategies for BSF business taking into account the increase in demand for new markets, such as electric vehicles, which require battery power.
Development of the Battery Separator Film Business
TonenGeneral established a joint venture for development, production, and sales of battery separator film (BSF) with Toray Industries, Inc., an integrated chemicals corporate group. The joint venture began operations on February 1, 2010. The joint venture will build on TonenGeneral’s experience over the last 20 years in providing separator films for use in the personal electronics market and Toray's expertise in research and development to deliver more than either company could do by itself.
Expansion on Business Opportunities from the Joint Venture Establishment
The 50:50 joint venture was formed through a contribution of about 60 billion yen by Toray Industries, Inc. into Tonen Specialty Separator Godo Kaisha, a wholly owned subsidiary of TonenGeneral, and started its operations in February 1, 2010. BSF is an integral component of lithium-ion batteries, and is essential for their safe operation. Demand for BSF is expected to increase, not only for batteries in the electronics market, but for the use of environmentally- friendly electric and hybrid vehicles. TonenGeneral had focused on BSF as a key business area in specialty chemicals for many years. In response to anticipated market trends, we have accelerated the development of BSF for automotive applications through the joint venture.
Expansion of BSF Production
Our BSF business has started operations at a new production facility in Gumi, South Korea, in addition to its existing domestic production base in Nasu, Japan. In the new plant, two production lines with the most modern facilities and the capacity to produce over 30 million square meters of film annually started operation earlier this year. The new plant will dramatically increase our BSF supply capability, allowing us to respond flexibly and quickly to growing demand.
