Sumitomo exits caprolactam business as it eyes more profitable, sustainable businesses

Sumitomo Chemical’s April 15 announcement that it will be exiting the caprolactam business, closing down the 85,000-tonnes/year polyamide 6 precursor plant at its Ehime Works on the island of Shikoku, Japan is perhaps overshadowed by the company’s plans to transform the site into one more in tune with the times. Caprolactam production will cease in October 2022.

While the production of caprolactam will be discontinued, Sumitomo Chemical is actively transforming the operations of Ehime Works in response to changes in the market. After a production capacity expansion for the feed additive methionine in 2018, the company has kicked off construction of plants for high purity chemicals for semiconductors and liquid crystal polymer (LCP). In addition, to prepare for the new era of carbon neutrality, the company is constructing a chemical recycling pilot facility for acrylic resin and reconfiguring its infrastructure by inviting an affiliated company to construct an LNG terminal within the site. Elsewhere, in Chiba, Sumitomo Chemical plans to develop technology to produce bio-ethylene.

Sumitomo Chemical started production of caprolactam at its Ehime Works in 1965, employing a liquid-phase process, and has since been engaged in the business for more than 50 years. In 2015, as global production capacity swelled, primarily driven by a large build-up in China, the company shut down its liquid-phase process production line to focus on its gas-phase process production line that started up in 2003, which produces no by-product ammonium sulfate. While it continued to pursue technology improvements and cost reductions, the company has come to the conclusion that it will be difficult to secure sustainable competitiveness, and has therefore decided to exit the caprolactam business. Sumitomo Chemical will, however, continue to manufacture and sell cyclohexanone, an intermediate raw material for caprolactam, as the business environment for that product is expected to remain solid.