Japan’s largest acrylic fibre maker, Mitsubishi Rayon Co, has finalised a deal to consolidate its ABS resin business with those of Ube Industries Ltd and General Electric Co, a Japanese daily reported.
In a bid to cut costs, the three firms will form a joint venture in April that unites their businesses in ABS (acrylonitrile butadien styrene) resin, a common plastic used for cars and home appliances, the Yomiuri Shimbun said on Sunday.
The new firm, with annual output of 176,000 tonnes, would be Japan’s third-largest ABS maker.
No one at Mitsubishi Rayon was available to comment on the deal, which the Yomiuri said was slated to be announced on Monday.
The joint venture aims to rake in 38 billion yen ($309.8 million) during the 2004 business year, utilising each firm’s client base and slashing costs by 2.5bn yen a year for the trio, the paper said.
Mitsubishi Rayon in July said it was in tie-up talks with the two firms as Japanese ABS makers – with smaller capacities than those of overseas rivals – faced global competition and mounting pressure to consolidate their operations.
Mitsubishi and Ube, a diversified maker of chemicals and cement, are each to take 43 per cent of the joint venture, while GE is to acquire 14 per cent.
Shares in Mitsubishi Rayon were down 0.29 per cent at 340 yen as of 0021 GMT, while Ube’s were unchanged at 198 yen. The benchmark Nikkei average lost 0.44 per cent.