Sector News

Ineos to buy Mitsui Chemicals’ Singapore phenol operations for $330 million

August 28, 2022
Energy & Chemical Value Chain

Mitsui Chemicals says it has decided to sell its affiliate Mitsui Phenols Singapore (MPS) to Ineos. The transfer of operations is scheduled to take place in March 2023 and the deal is valued at about $330 million. Mitsui says that the final value will be determined after post-closing adjustments.

MPS generates annual sales of $750 million from an integrated production complex at Jurong Island, Singapore, with total capacity of more than 1 million metric tons/year (MMt/y). The complex can produce 410,000 metric tons/year of cumene; 310,000 metric tons/year of phenol; 185,000 metric tons/year of acetone; 20,000 metric tons/year of alpha-methylstyrene; and 150,000 metric tons/year of bisphenol A (BPA).

Ineos says that adding the Jurong Island assets provides a good fit with the company’s existing portfolio in the phenol chain as well as the “expertise of Inoes Phenol, and presents significant integration opportunities with its manufacturing sites in Germany, Belgium, and the US.” Ineos says it is the largest producer of phenol and acetone worldwide with just under 1.9 MMt/y of phenol capacity and about 1.2 MMt/y of acetone production.

Ineos says that, using cumene as raw material, it produces phenol, acetone, alpha-methylstyrene, and BPA, which it supplies to customers for the production of polycarbonate (PC) and other plastics, phenolic resins, synthetic fibers, and solvents. These products are used in a range of end markets including the automotive, construction, electronics, healthcare, surgical, and fiber industries, add Ineos.

MPS has run its operations at Jurong Island since the business was established in 1999.

Mitsui Chemicals has positioned its phenols business as one of several restructuring targets under the company’s basic and green materials business sector, under its Vision 2030 long-term business plan. The business plan aims to reduce earnings volatility through measures such as an asset-light strategy.

Mitsui says that after exploring several options for MPS, including collaboration with other companies, it decided to sell the business to Ineos. Mitsui says it will continue to operate its other phenol plants at Osaka and Chiba, Japan, and Shanghai, China.

As of 2022, Mitsui Chemicals is the third-largest producer of phenol, according to data from the Chemical Economics Handbook (CEH) by S&P Global Commodity Insights.

According to CEH, the global phenol market is driven predominantly by demand for BPA, which accounts for almost half of global phenol consumption. BPA consumption is driven by demand for PC, for which growth is expected to remain above GDP growth rates, adds CEH.

Aiming to achieve carbon neutrality by 2050, Mitsui Chemicals has been stepping up its efforts to adapt to a circular economy, which has included the company’s establishment of a green sustainable chemicals division in April 2022.

Mitsui also plans to enhance the environmentally friendly product offerings of its phenols business by expanding its lineup of International Sustainability and Carbon Certification (ISCC)–certified products made with biobased hydrocarbons—a lineup that currently encompasses phenol, acetone, BPA, and alpha-methylstyrene.

MPS is the second big petrochemicals M&A transaction to be announced by Ineos in Asia recently. Ineos signed deals in China in late July with Sinopec worth a combined $7 billion.

By Kartik Kohli


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