Sumitomo Chemical, Zeon Corp. to combine S-SBR activities in JV

Japan’s Sumitomo Chemical and Zeon Corporation are setting up a joint venture company to facilitate the integration of both firms’ solution styrene butadiene rubber (S-SBR) businesses. The resulting company will be called ZS Elastomer Co. Ltd. (ZSE) and will be 60 per cent owned by Zeon Corporation, with Sumitomo Corporation holding the remainin 40 per cent share. Sumitomo Chemical and Zeon will each succeed the rights and obligations of the sales and R&D functions their respective S-SBR business to ZSE.

Sumitomo Chemical’s S-SBR is used as a feedstock for fuel-efficient tyres. Demand for these products is likely to keep rising in the future, and as a result competition in the marketplace is expected to intensify and production capacities will grow. Therefore, Sumitomo Chemical and Zeon looked into various opportunities to co-operate, including bringing their technologies together to develop new products that better meet customer needs, further increasing both companies’ cost-competitiveness, forming a new joint venture capable of strengthening the business through an ensured stable supply of products, or transferring their S-SBR business operations, including those of their respective affiliates, to a newly formed joint venture. After in-depth consideration, the two companies recently agreed that certain synergistic benefits should accrue from integrating their businesses.

The joint venture agreement document was executed on 2 December and the joint venture company is expected to be established on 8 December.