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Sumitomo Chemical Transfers All of its Shares in Two Polypropylene Compound Companies in Zhuhai and Dalian, China
Accelerating Business Restructuring as Part of its Short-Term Intensive Performance Improvement Measures
Dec. 18, 2024
Sumitomo Chemical Co., Ltd. has transferred all of its shares in its two polypropylene compound business companies in China, Zhuhai Sumika Polymer Compounds Co., Ltd. and Sumika Polymer Compounds Dalian Co., Ltd., to Guangzhou Suptech Material Technology Co., Ltd., a compound business company in the country.
Polypropylene compound is a high-performance material made by blending polypropylene (PP) with synthetic rubber, glass fibers, inorganic fillers and other materials, and it offers enhanced functionality and rigidity. The material is primarily used in automotive bumpers, interior materials, and household appliances. Sumitomo Chemical has expanded its PP compound manufacturing and sales footprint in North America, Europe, and Asia since the 2000s, as Japanese automobile manufacturers, its major customers, have built global supply chains.
Going forward, Zhuhai Sumika Polymer Compounds and Sumika Polymer Compounds Dalian in China are expected to continue to face an increasingly competitive business environment, with other local compounders’ market shares rapidly increasing. In view of these circumstances, Sumitomo Chemical has transferred all of its shares in these companies to Guangzhou Suptech Material Technology, which possesses strong technological capabilities as well as significant growth potential in the Chinese market. Sumitomo Chemical considers Guangzhou Suptech Material Technology the best owner for these businesses and believes that enhancing their efficiency under the new ownership will be the best way forward.
Overview of the companies to be transferred
| Company name | Zhuhai Sumika Polymer Compounds Co., Ltd. | Sumika Polymer Compounds Dalian Co., Ltd. |
|---|---|---|
| Principal place of business | Zhuhai City, Guangdong Province, China | Dalian City, Liaoning Province, China |
| Year established | 2005 | 2011 |
| Business | Manufacture and sale of PP compounds | Manufacture and sales of PP compounds and thermoplastic elastomers |
| Capital Structure |
Sumitomo Chemical: 55% Other shareholders: 45% |
Sumitomo Chemical: 50% Zhuhai Sumika Polymer Compounds: 50% |
Overview of the transferee company
| Company name | Guangzhou Suptech Material Technology Co., Ltd., |
|---|---|
| Principal place of business | Guangzhou City, Guangdong Province, China |
| Year established | 2018 |
| Business | Manufacture and sale of PP, ABS and other plastic products (compound products, etc.) |
| Representative | Wen Jianghe, Chairman |
Sumitomo Chemical is implementing short-term intensive performance improvement measures and, as part of these efforts, is accelerating the restructuring of its businesses from the perspective of profitability and the best-owner principle. The Company will steadily advance these measures to ensure a V-shaped recovery in fiscal 2024, while also carrying out fundamental structural reforms.
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