DIC Corporation and Hitachi Chemical Co., Ltd. agreed this month that their joint venture, DH Material Inc., will become a wholly owned subsidiary of DIC. DH Material was established in February 2005, with DIC and Hitachi Chemical each contributing 50% of the total investment, principally to handle the two companies’ unsaturated polyester resins and vinyl ester resins manufacturing, sales, research and development activities in Japan.
Since then, DHM has advanced its business, mainly within Japan, by leveraging strengths realized through the joint venture, including production efficiency, the creation of a sales structure, commercial rights and technological capabilities. However, since the collapse of Lehman Brothers, the Japanese market for unsaturated polyester resins and vinyl ester resins has shrunk. This, combined with rising prices for key petrochemical raw materials, has contributed to an increasingly harsh business environment in recent years.
DIC anticipates that overseas demand for these products will increase, particularly in China and Southeast Asia, and has resolved to expand its business in countries such as Thailand, Indonesia and China, where it had successfully made inroads prior to the establishment of DHM.
As a result, on Oct. 1, 2013, DHM will make a new start as a wholly owned subsidiary of DIC. Subsequently, Hitachi Chemical will take over the production facilities of DHM’s Yamazaki plant. For a specified period of time, the manufacture of products currently put out by the Yamazaki plant will be contracted to Hitachi Chemical, thereby ensuring supplies continue.
In Japan, DIC will advance appropriate facility renovations at its Sakai plant and work diligently to maintain and eventually grow its domestic unsaturated polyester resins and vinyl ester resins businesses, while overseas it will actively leverage DHM’s operational resources to expand these businesses in China and other parts of Asia.