Sanyo Chemical to Withdraw Superabsorbent Polymer Business, Closing Plants in Malaysia and China
Sanyo Chemical Industry Co., Ltd. (Sanyo Chemical) has announced its decision to withdraw from the superabsorbent polymer (SAP) business, a major component in disposable diapers and other hygiene products. This move marks a significant shift in the company's strategic direction as it seeks to enhance profitability and align with its long-term sustainability goals.
Sanyo Chemical has been a prominent player in the SAP market since its inception in 1978. However, the company has faced increasing competitive pressures in recent years due to the entry of new manufacturers and the expansion of the Asian diaper market. These factors have led to oversupply and price erosion, negatively impacting the profitability of Sanyo Chemical
Sanyo Chemical's SAP operations.
In response to these challenges, Sanyo Chemical has embarked on a strategic restructuring plan under its "New Medium-Term Management Plan 2025." The company aims to focus on its core businesses with higher profit margins, expand its portfolio of high-value products, and prioritize new business opportunities that align with its sustainability and quality of life goals.
SAP Business Withdrawal and Plant Closures
As part of this strategic realignment, Sanyo Chemical will withdraw from the SAP business and close its manufacturing plants in Malaysia (SDP GLOBAL (Malaysia) Sdn. Bhd.) and China (Sanyo Fine Chemicals (Nantong) Co., Ltd.). The closure of these facilities is expected to be completed by the end of March 2024.
Financial Impact and Future Outlook
The withdrawal from the SAP business is expected to generate a total of approximately JPY 20 billion in special losses for Sanyo Chemical. As a result, the company has revised its financial forecast for the fiscal year ending March 2024, projecting a net loss instead of the previously anticipated profit of JPY 50 billion.
Despite this setback, Sanyo Chemical remains committed to its long-term vision and the objectives outlined in its "New Medium-Term Management Plan 2025." The company is confident that its strategic realignment will enable it to strengthen its financial position, enhance its environmental performance, and pursue new growth opportunities aligned with its long-term goals.
Key Takeaways
- Sanyo Chemical Industry Co., Ltd. is withdrawing from the superabsorbent polymer (SAP) business due to declining profitability and strategic realignment.
- The company will close its SAP manufacturing plants in Malaysia and China, leading to a total of JPY 20 billion in special losses.
- Sanyo Chemical remains committed to its long-term vision and is pursuing strategic initiatives to enhance profitability and sustainability.
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Date of record
25 March 2024
