Japan’s Mitsubishi Chemical Holdings Corp (MCHC) announced plans to exit petrochemicals and carbon products businesses on its road to carbon neutrality by 2050.
Japan’s largest chemicals maker said it will “carve-out” its petrochemicals and carbon products businesses by fiscal 2023.
“In the medium term it is our goal to completely exit these businesses,” CEO Jean-Marc Gilson said at the briefing, citing the rising cost of energy that’s set to drive consolidation in Japan. The units will likely first be merged with another Japanese firm, after which Mitsubishi Chemical will exit through a sale or IPO, he said.
The company said it will focus on specialty materials for electronics, healthcare and life science sectors as a part of its new management policy covering period up to the end of fiscal 2025.
Under electronics, the company will target growth opportunities in electric vehicle lightweight materials, batteries and semiconductors.
“We will lead innovation in targeted areas in the food sector, and in healthcare we will realize the value of late-stage development assets such as a potential coronavirus vaccine,” added MCHC, with healthcare expected to contribute JPY130 billion in revenue in fiscal 2025.
The company said it will reduce costs by more than JPY100 billion per year by fiscal 2025.
MCHC said it will keep capital expenditures less than depreciation and amortisation as a part of its latest strategic allocation plan. The company will accelerate “deleveraging” and will review its current dividend policy with a view to increase shareholder return.
The company said its base target group revenue for fiscal 2025 was at JPY3 trillion which is less than JPY3.258 trillion reported in fiscal 2021. However, base earnings before interests, taxes, deprecation and amortisation margin is target at about 18% to 20% in fiscal 2025 compared with 12.5% reported in fiscal 2021.