Sumitomo Chemical 100 Years

Sumitomo Chemical 100 Years

Published: August 2014

Published by Sumitomo Chemical Co.,Ltd.
Production and editing : Sumitomo Chemical Co.,Ltd.,
Corporate History Editorial Office27-1, Shinkawa 2-chome, Chuo-ku, Tokyo, Japan

Production assisted by Dai Nippon Printing Co.,Ltd.
Printed in Japan by Dai Nippon Printing Co.,Ltd.

CONTENTS

Chairman’s Message
President’s Message
The Path to a Global Chemical Company
1. The History of Sumitomo

8

2. History of Sumitomo Fertilizer Works

10

3. Going from a Fertilizer Manufacturer to a Chemical Company

14

4. Moving into Fine Chemicals

16

5. Post-war Recovery

18

6. Moving into the Agricultural Chemicals Business20

7. Growth of the Pharmaceuticals Sector

22

8. Entering the Field of Petrochemicals

24

9. Dealing with the Oil Crises

26

10. Rise and Decline of Aluminum Business28

11. Construction of Singapore Petrochemical Complex

32

12. Separation of Pharmaceutical Business from Sumitomo Chemical and Inaugurationof Dainippon Sumitomo Pharma Co., Ltd.

34

13. Expansion of Agricultural Chemicals Business36

14. IT-related Chemicals Sector Established and Business Grows

38

15. Progress of the Rabigh Project40

16. Aiming to be a Truly Global Chemical Company

42

17. For a Better Tomorrow

46

Reports from Regional Headquarters

48

Report from Beijing by Sumitomo Chemical (China) Co., Ltd.

48

Report from Singapore by Sumitomo Chemical (Asia Pacific) Pte Ltd

50

Report from Brussels by Sumitomo Chemical Europe S.A./N.V.

52

Report from New York by Sumitomo Chemical America, Inc.

54

The Sumitomo Spirit and Sumitomo Chemical’s Business Philosophy

56

Recent Sales and Profits

57

Sumitomo Chemical Locations in Japan

58

Major Companies of Sumitomo Chemical Group: Japan

59

Major Companies of Sumitomo Chemical Group: International

60

Chronology of Sumitomo Chemical

62

Chairman’s Message
In October 2015, Sumitomo Chemical will celebrate its 100 year anniversary.

triggered by the fall of Lehman Brothers and the subsequent global recession. Even in the face of these

As a member of the Sumitomo Group, which has

challenges, however, we have driven innovation toa history and tradition dating back 400 years, wecreate new opportunities for growth and carried out ahave carried on Sumitomo’s business philosophy,

series of strategic initiatives to build a strong founda-

which gives priority to maintaining society’s trust whiletion for future growth—the expansion of our agricul-

emphasizing that our business must not only ben-tural chemicals business overseas, the strengthening

efit our own interests but also society at large. Thisof our pharmaceutical business, the establishment ofphilosophy is, in fact, firmly embedded in Sumitomo

the IT-related Chemicals Sector, our Singapore pet-

Chemical’s DNA. The company began as a fertiliz-rochemical project, and the Rabigh Project in Saudi

er manufacturing plant of the House of Sumitomo,

Arabia.

to transform harmful sulfur dioxide emissions from

Sumitomo Chemical will remain firmly committed

smelting operations at the Besshi Copper Mine into

to contributing, through innovation, to solving a range

calcium superphosphate fertilizers. In other words, itof challenges facing society, and will continue to strive

was established not merely for financial gain, but toto achieve strong and sustained growth by reinvent-contribute to the nation and society by providing a

ing itself to meet the evolving needs of the times.

solution to an environmental problem and helping to

I sincerely hope that you will learn from Sumitomo

increase agricultural production.

Chemical’s 100 year history and take action to bring

Sumitomo’s business philosophy also stresses
that we should keep a close watch on the changing ofabout change, driving the company’s dynamic growth
into its second century.

the times, carefully weighing opportunities and risks,

August 2014

and seeking long-term sustainable growth, rather thanchasing short-term gains. Over the past one hundredyears, Sumitomo Chemical has put this principle
into practice, striving to achieve growth by meetingthe needs of the times and continuously developing
innovative new technologies. Along the way, we haveencountered enormous upheavals, including WorldWar II and its aftermath, the two oil crises of the
1970s, the end of the Cold War, recessions causedby the overvalued yen, the bubble economy of thelate 1980s and its collapse, and the financial crisis

Osamu Ishitobi
Chairman & CEO
Sumitomo Chemical Co., Ltd.

President’s Message
Next year will be the 100th anniversary since

global challenges, such as issues relating to the envi-

Sumitomo Chemical started its operation as a fertilizer

ronment, natural resources, energy, and food supply.

manufacturing plant of the House of Sumitomo, ship-

The Sumitomo Chemical Group will continue to pro-ping out the first lot of calcium superphosphate fertil-vide effective solutions to these challenges by draw-

izer from Niihama, Japan, on October 4, 1915.

ing on the power of chemistry, and to contribute to

In its early years, Sumitomo Chemical worked tobuilding better lives by developing various businesses

expand its business into the manufacturing of ammo-that meet the evolving needs of the times and by con-

nia and other industrial chemicals, as well as alumi-

tinuously delivering technological innovation.

num, to make its way into the modern chemical indus-

This booklet is to commemorate our upcoming

try. In the 1950s, Sumitomo Chemical moved into the100th anniversary and to help share the company’s

petrochemical business well before its competitors,

history with all members of the Sumitomo Chemicaland enhanced its fine chemical businesses, thereby

Group around the world. Let us take a look back at

becoming a full-fledged diversified chemical com-the path that has brought us here and move forward

pany. From then on, we have been pressing ahead

together in unity to make our next century a brilliant

with the globalization of our businesses in the areasone.

of petrochemicals, ICT-related materials, agriculturalchemicals and pharmaceuticals.
The very reason that Sumitomo Chemical has
been able to achieve growth over nearly one hundred years, surviving hard times along the way, isbecause the people at this company have boldly andunflinchingly carried out business restructuring andother major change initiatives to meet the needs ofthe times. This history is a great source of confidence
and pride for me. Times are changing more rapidly
and more significantly. I would like each of you at the
Sumitomo Chemical Group to continue to demonstrate a can-do spirit, take on new challenges, andexplore new paths to achieve strong and sustained
growth.
In particular, the chemical industry is being called
upon to take an even greater role in solving pressing

Masakazu Tokura
President & COO
Sumitomo Chemical Co., Ltd.

August 2014

The Path to a Global Chemical
Company
Sumitomo Chemical was established in 1913 as a fertilizer plant under direct management of Sumitomo General Head
Office and commenced business in 1915. Thus Sumitomo Chemical is looking forward to its 100th anniversary in 2015.
When production of fertilizer (calcium superphosphate) began at the end of 1915, there were only 158 employees. As of theend of March 2014, Sumitomo Chemical has grown to become a leading chemical company in the world, with affiliates in 33
countries, 164 consolidated subsidiaries and more than 30,000 employees.
Looking back at the hundred-year history of this global chemical company, we can divide it into three thirty-year periods
plus the most recent decade.

Building the foundation of a chemicalcompany

Diversifying into petrochemicals andfine chemicals

The thirty years following the start of business
was the age of “building the foundation of a chemical manufacturer.” Sumitomo Fertilizer Works wasfounded to prevent pollution caused by sulfur dioxide
gas emissions from copper smelting. Its first products were sulfuric acid and calcium superphosphate.
Introduction and development of new technology led
to the production of ammonia, nitric acid, methanol,
formalin, and other industrial chemicals, forming adiverse product range and the foundation for a chemical manufacturer.

During the next thirty years, Sumitomo Chemical
entered the fields of petrochemicals and fine chemicals. In 1944, Sumitomo Chemical merged with Japan
Dyestuff Manufacturing Company (JDMC) and entered
the field of fine chemicals. Pynamin, a household
insecticide, was launched in 1953, the first step into
the field of agricultural chemicals. Then, in 1958, an
ethylene plant was completed in Ehime Prefecture,and Sumitomo Chemical began its petrochemicalbusiness. A large ethylene plant in Chiba Prefecture
was built in 1965, and business expanded in tandemwith the era of rapid growth of the Japanese economy.

View of the ammonia plant (Ehime)

Night view of the ethylene plant (Chiba)

Fertilizer transport ship

Actively promoting global business

Becoming a truly global chemical company

During the thirty years beginning in the 1970s,
Sumitomo Chemical entered the age of global expansion. These years brought dramatic change due to aseries of external factors: major oil crises, recession
due to overvaluation of the yen, and the burst of theeconomic bubble. Sumitomo Chemical has continued
to undertake reforms to keep in step with shifts in the
global economy and society: restructuring its businesses by leaving fields that prove unprofitable, moving into the petrochemical business in Singapore andexpanding overseas enterprises in specialty chemicalbusinesses such as agricultural chemicals. The ICT(Information and Communication Technology) industry
saw rapid development in the 1990s, which meant
growth in the IT-related chemicals field. Sumitomo
Chemical responded by expanding its business withnew overseas production bases.

The last decade was characterized by the promotion of globally integrated management. Megacompetition has accelerated since the turn of the
century, and in FY 2004 (ended March 31, 2005),
Sumitomo Chemical set forth as a goal “becoming
a truly global chemical company” in the Corporate
Business Plan FY 2004-2006. In keeping with thisgoal, Sumitomo Chemical has become involved with
the Rabigh Project, expanded its IT-related Chemicals
Sector, and promoted globalization of the Sumitomo
Chemical Group as a whole. During FY 2010, net
sales for consolidated subsidiaries overseas exceeded 50% of Sumitomo Chemical’s net sales, with overseas production accounting for more than 40% of thecompany’s total.
Looking toward the second century of this global
chemical company, the next step will be nurturing new
business under the philosophy of creating new values
with “Creative Hybrid Chemistry.”

Petro Rabigh begins ethane cracker
operations
Dainippon Sumitomo Pharma Co.,Ltd.
established
IT-related Chemicals Sector established
Second phase of Singapore Petrochemical
Complex begins operations
Construction site of PCS second phase ethylene facilities (Singapore)

Tsukuba Research Laboratory established
Valent U.S.A. Corp. established in the United States
Sumitomo Pharmaceuticals Co., Ltd. establishedFirst phase of Singapore Petrochemical Complex begins operations
Misawa Works begins operations

Takarazuka Research Laboratory established

Sumitomo Chiba Chemical Co., Ltd. established
Sumithion launched as an insecticide for agricultural use

Main facilities of Misawa Works

Production of ethylene and its derivatives begins in Ehime
Pynamin launched as an insecticide for household use

Sumitomo Chemical merges with Japan Dyestuff Manufacturing Company
Full-scale production of methanol and formalin begins
Name changed to Sumitomo Chemical Co., Ltd. / Completion of first plant in Japan for large-scale production of sulfuric acid producedby contact process and Sumitomo Chemical’s first nitric acid plant / Enters the aluminum business
Full-scale production of ammonia and ammonium sulfate begins

The Sumitomo Fertilizer Works, Ltd. established

Sumitomo Fertilizer Works opens for business
Sumitomo Fertilizer Works founded1 The History of Sumitomo
Sumitomo Chemical is a company in the Sumitomo Group,
which has a history that dates back about 400 years to the end of
the 16th century. Starting with copper refining business, the Houseof Sumitomo gradually expanded into copper mining and exports.
The Besshi Copper Mine, in particular, played a crucial role in
Sumitomo’s growth and modernization. Even today, every entity of
the Sumitomo Group carries on the original spirit of the House of
Sumitomo, as encapsulated in Sumitomo’s Business Principles.

Statue of Masatomo Sumitomo.
(Source: Sumitomo Historical Archives)

Commencement of the Sumitomo business
The history of Sumitomo starts with two pre-eminent men who were instrumental in founding theSumitomo business.
One was Masatomo Sumitomo (1585-1652), thefounder of the House of Sumitomo. Born into a samurai family, he became a disciple of a Buddhist priest in
Kyoto at the age of 12, eventually becoming foremost
among the disciples. Masatomo’s Buddhist denomination, however, lost the favor of the ruling regime ledby the Tokugawa family, and was forcibly absorbed

Drawing of nanban-buki copper processing from
Kodo Zuroku, a pictorial booklet about copper production issued by the Sumitomo Family at the beginning of the 19th century(Source: Sumitomo Historical Archives)

into another denomination. Under the circumstances, Masatomo decided to leave the priesthood andbegan a shop to deal in books and medicine in Kyoto,
but continued throughout his lifetime to practice his
faith in the secular world. Masatomo’s attitude towardbusiness, based on his wisdom and virtuous char-ried Masatomo Sumitomo’s daughter and took theacter, has been handed down over the centuries andname Tomomochi Sumitomo. Tomomochi succeed-

today constitutes the business principles upheld by

ed Riemon’s business, and the House of Sumitomo

the Sumitomo Group Companies, including Sumitomocame to be known for its copper business. In 1623,

Chemical.

Tomomochi expanded the family business from Kyoto

The other man instrumental in founding Sumitomo

to Osaka, where he began a copper export busi-

was Riemon Soga (1572-1636), who married the elder

ness. Father Riemon and son Tomomochi taught theirsister of Masatomo. In 1590, Riemon began a copper

unique technology to Osaka copper refiners. As arefining and smithing business in Kyoto. Taking cues

result, Osaka prospered as a hub for copper refining,from Portuguese he knew, he eventually developed

and the House of Sumitomo was recognized to be its

a unique technology for separating silver from crudeleader.

copper (“nanban-buki” copper processing). Until then,Japan exported its copper still containing silver. By
applying Riemon’s new technology, Japan was able toretrieve silver in copper ore.
The first son Rihei (1607-1662) of Riemon mar-

8

The Opening of the Besshi Copper Mine
After several decades, the House of Sumitomo
ventured into the copper mining business. In 1690,
Sumitomo discovered copper in Ehime PrefectureSumitomo Chemical 100 Yearsand opened the Besshi

a metamorphosis as it shifted from a traditional family

Copper Mine. Besshi stead-business to become a modern corporation.

ily increased its copper pro-In 1882, Saihei Hirose, then head of the board

duction and in 1698 recordedof directors, received an order from Tomochika

1,521 tons, or one-fourth of

Sumitomo (1843-1890), the twelfth generation head ofJapan’s total copper output atthe House of Sumitomo, to establish governing rulesthat time.

for the House of Sumitomo, incorporating the spirit

Nearly two centuries later,in 1868, the copper production at Besshi fell to about

originating from founder Masatomo Sumitomo, andSaihei Hirose(Source: Sumitomo
Historical Archives)

stipulating matters of organization and operations.
In 1891, the governing rules were separated into

400 tons. Saihei Hirose, who

two parts, corporate rules and family constitution.

became the general manager of the Besshi Copper

At the very beginning of the corporate rules section,

Mine in 1865 and would later become the first Director

Sumitomo’s Business Principles were proclaimed as

General of the House of Sumitomo, modernized thefollows:

mine based on a prospectus for the rationalization of

1. Sumitomo shall achieve prosperity based on

the mine compiled by a French engineer. In addition,solid foundation by placing prime importance

Hirose introduced western technology, such as dyna-

on integrity and sound management in the con-mite, rock drills, steam engines and coke to replaceduct of its business.

charcoal in smelting copper. As a result, in 1888,

2. Sumitomo’s business interest must always be

Besshi copper production rose to a record 1,745 tons.

in harmony with public interest; Sumitomo shalladapt to good times and bad times but will not

Sumitomo’s Business Principles

pursue immoral business.

In 1868, Japan experienced a drastic change.

Sumitomo’s Business Principles remain in effect

The 250-year rule of the Tokugawa Shogunate cameto this day, functioning as fundamental guiding prin-

to a close and the new government promoted the

ciples for the Sumitomo Group Companies, including

modernization of Japan by opening the country to theSumitomo Chemical.

rest of the world. A new constitution was adopted in
1889, and the Imperial Diet was established in 1890.
During this time, the House of Sumitomo underwent

The Besshi Mine Railway, opened in 1893
(Source: Sumitomo Historical Archives)

Block print of the Besshi Copper Mine
(Source: Sumitomo Historical Archives)

9

2 History of Sumitomo Fertilizer Works
Sumitomo Fertilizer Works, the predecessor of Sumitomo Chemical, was established withtwo missions. One was to resolve the pollution caused by the gas emissions from copper production and the other was to produce fertilizers in an effort to help farmers improve their harvests.
Sumitomo Chemical commenced its business based on the spirit of corporate social responsibility (CSR), contributing to society through its business activities, long before the term became
popular.
Sumitomo Fertilizer Works was established and began construction, preparation for production, and sales & marketing in 1913 under direct management of Sumitomo General Head Office.
Actual sales started in 1915 and 10 years later, the business was incorporated as The Sumitomo
Fertilizer Works, Ltd.

Copper smelting plants in Niihama in Ehime(Source: Sumitomo Historical Archives)

Resolving Gas Emission Pollution
Several measures introduced by Saihei Hirose

lem. In 1884 and 1888, thefor modernization of the Besshi Copper Mine were

Besshi Copper Mine built

immensely successful and production increased tosmelting plants using west-

3,000 tons in 1897, up from 422 tons in 1868. By 1909

ern technology in Niihama

this figure doubled to 6,000 tons. As the Besshi Copper

City, Ehime Prefecture. It

Mine was modernized and its copper business grew,quickly became evident thatsome of the mining operations were separated and fur-the plants emitted gas con-ther developed into new businesses, and the Sumitomo

taining sulfur dioxide thatGroup began to take form. Charcoal and mine tim-

damaged crops grown in surrounding fields. The situa-

ber operations gave rise to forestry business. Civil

tion became more serious when full-scale copper pro-engineering developed into the construction business.

duction began in 1894. Local farmers made appeals toEquipment repair and production grew into a machin-

the prefectural government for countermeasures.

Teigo Iba
(Source: Sumitomo Historical
Archives)

ery manufacturing industry. Sumitomo expanded its

To solve the gas emission issue, Teigo Iba (thebusiness into the copper rolling industry to process thesecond Director General of the House of Sumitomo)

mine’s copper, and related technology spread to elec-

was assigned to oversee the Besshi Copper Mine. He

tric wire and metals operations. The establishment of asought a fundamental solution and took the radicalbank and of warehouses funded by the earnings fromstep of relocating the plant and smelting operation to

the mine was followed by expansion into insurance,

Shisaka Island, an uninhabited island 20 kilometers

trust banking, and other financial areas.

offshore of Niihama. The estimated cost of the move

In the meantime, the expansion of copper smelting

10

faced an unexpected prob-

was equivalent to two years of profits of the Besshi

Sumitomo Chemical 100 Years

Copper Mine, and ultimately

Seto Inland Sea coast.

cost three times as much.

At this point, Sumitomo decided that pollutants

I b a a l s o u n d e r to o k

had to be eradicated. In other words, to control sul-reforestation of the moun-fur dioxide generated by smelting, they decided totains a round the mine

produce sulfuric acid from sulfide ore, and use it tothat had been denuded

make calcium superphosphate. Not only would thisdue to the gas emissions

eliminate pollution, but it would provide affordable fer-and deforestation. As thetilizers to farmers and contribute to agriculture. To put

amount of copper produced
increased, more and more

Masaya Suzuki(Source: Sumitomo Historical
Archives)

this plan into action, Sumitomo Fertilizer Works, thepredecessor of Sumitomo Chemical, was established.

wood was consumed in the form of firewood, char-Due to high production cost with the low level ofcoal, and pit prop. About 60,000 trees per year had

technology of those days as well as the markets forbeen planted, but in 1897 this figure leaped to one

sulfuric acid and calcium superphosphate not being

million and surpassed two million by 1901. Iba waslarge enough, Sumitomo found it would be difficult toquoted as saying that Sumitomo must return theturn a profit. Some executives insisted that it would beentire mountain area around Besshi to its former lush

better to sell sulfide ore rather than processing it into

natural state. Iba’s work was carried on by Masaya

sulfuric acid, but Director General Suzuki declared

Suzuki, the third Director General, who expanded thethat he would maintain a policy of pursuing the good

Sumitomo forestry business throughout the country.

of both mining and agriculture. In 1909, at a meetingwith the leaders of the agricultural community, he was

Toward a Fundamental Solution

recorded as saying the following.

An enormous amount of money was invested in“If a way to rid gas emissions of sulfur dioxide werethe Shisaka Island Smelting Works as a way to solve

invented, Sumitomo would be fully prepared to con-the gas emission problem, but it did not meet expec-

struct the appropriate facilities, even if it were moretations.

expensive than the cost of compensating the damag-

Immediately after the new offshore plant went

es of the gas emissions.”

into operation in January 1905, the villages on the

Sumitomo has always stood by the notion of “har-shore opposite it began to complain of damage. It

mony between the individual, the nation and society.”turned out that sulfur dioxide was not dispersed in

In other words, Sumitomo’s undertakings, while bene-

the atmosphere and rendered harmless, but instead

fiting Sumitomo itself, must at the same time promote

blown 20 kilometers over open water to, once again,

the welfare of the country and of society. The manner

destroy crops. Pollution, as a result, spread even fur-in which Sumitomo solved the problem of the gas

ther, to areas west of Niihama and other parts of theemissions was one of the best examples of Sumitomo

Shisaka Island Smelting Works(Source: Sumitomo Historical Archives)11Calcium superphosphate warehouseland in Niihama in Ehime. Plans were to build facilities to
produce sulfuric acid as well as nitric acid, and to manNotice announcing establishment of Sumitomo
Fertilizer Works(Source: Sumitomo Historical Archives)

ufacture 75,000 tons of calcium superphosphate and acompound fertilizer a year using the technology of Ernstadhering to this principle. Taking responsibility toHartmann GmbH, a German company. Unfortunately,

resolve environmental problems and contributing tothis was rendered impossible with the outbreak of World

society through business activities is what is now

War I. Two sulfuric acid facilities with a conventional pro-called CSR, and we can see that this principle hascess were built instead.

been at work in Sumitomo Chemical from its start.

The chemical industry in Japan was still in its
developmental stage, and calcium superphosphate

Establishing Sumitomo Fertilizer Workssulfuric acid. At the time, calcium superphosphatefor gas emissions in November 1910, on September

was made by many small suppliers and the market

22, 1913, Sumitomo Fertilizer Works, the predecessor

was fraught with excessive competition.

of Sumitomo Chemical, was established under direct

The key to success in the fiercely competitive fer-management of Sumitomo General Head Office. The

tilizer business was a strong sales network. Sumitomo

construction of a plant began in November on reclaimed

Fertilizer Works began production in September 1915,

Sumitomo Fertilizer Works

12

was the only product that required large amounts ofWhile a settlement was reached on compensation

Sumitomo Chemical 100 Years

Packing fertilizer for shipment

and several months before that, in April, the Osaka

19,000 tons in 1916 and almost doubled to 36,000

Office opened, putting a strategic sales system into

tons in 1917, giving Sumitomo Fertilizer Works an 8%

place. The original plan was to sell products throughshare of total national production.

two routes. One was direct sales to industrial unions
and agricultural associations, and the other was sales

Reorganizing into a Corporation

through licensed agents in each region. Eventually,

In February 1921, Sumitomo General Head Office,however, licensed agencies that were selected fromwhich had been operated as an individual proprietor-

among the powerful and wealthy in each region

ship, was restructured into Sumitomo Goshi Kaisha

became the primary sales channels.

(SGK). As a part of the restructuring, on June 1, 1925

Calcium superphosphate produced by Sumitomo

Sumitomo Fertilizer Works was incorporated as The

Fertilizer Works was first shipped on October 4, 1915,

Sumitomo Fertilizer Works, Ltd., an independent entity.

during World War I. With most countries of Europe

The company became a 100% affiliate of SGK, run byat war, imports from the continent were disrupted,

Masatsune Ogura, SGK managing director. Ten years

creating a new demand for Japanese exports. The

had passed since the original fertilizer plant started

fertilizer industry prospered. With the wind at its back,business. It had 379 employees and was the third larg-

Sumitomo Fertilizer Works built new manufacturing

est company in the fertilizer industry, including sulfuric

facilities. Production of calcium superphosphate wasacid and nitric acid business, in Japan.

Fertilizer production (1915 to 1925)

Business performance (1915 to 1929)(Unit: tons)
80,000(%)
14
Calcium superphosphate annual production (left axis)
Compound fertilizer annual production (left axis)
Calcium superphosphate market share (right axis)
Compound fertilizer market share (right axis)

70,000(Unit: 1,000 yen)
7,000
6,000

(Unit: 1,000 yen)
700

Net sales (Industrial chemicals) (left axis)
Net sales (Fertilizers) (left axis)
Profit/Loss (right axis)

600

12

5,000

500

4,000

400

3,000

300

2,000

200

1,000

100

60,00010
50,0008
40,000
630,0004
20,000

0

0
1915

2

10,000

17

19

21

23

25

27

29
-100
-200

0

0
1915

17

19

21

23

25

-300

13

3 Going from a Fertilizer Manufacturer
to a Chemical Company
To increase consumption of sulfuric acid, The Sumitomo Fertilizer Works, Ltd. went into theammonium sulfate business in addition to producing calcium superphosphate. In conjunction
with this, the company also began to produce ammonia. Nitric acid, methanol, formalin, and otherindustrial chemical businesses were also expanded, thus preparing the foundation for a shift
from a fertilizer manufacturer to a chemical company.

View of entire works after the first-phase ammonia plant completion (the ammonia plant is on the right)

Introduction of Ammonia Synthesis Technology
After the end of World War I, Japan was in an
extended recession in the 1920s and the fertilizer
industry was also in a slump, with a remarkably poor
market for calcium superphosphate.
The Sumitomo Fertilizer Works, Ltd. initially went
into the fertilizer business as a way to resolve the pollution caused by sulfur dioxide gas emissions, but onlya small portion of the available sulfur from the Besshi
Copper Mine was being used, with poor market conditions making it difficult to increase production further.
Shisaka Island Smelting Works began to build facilities
to turn sulfur dioxide it emitted into sulfuric acid andplans were to begin operations in 1929. The enormous
Japan’s supply of ammonium sulfate (1912 to 1932)(Unit: 1,000 tons)
1,000
Total imports
Production in Japan
800

600

400

200

0
1912

15

18

21

24

Source: Data from Ministry of Agriculture and Forestry

14

27

30

amount of sulfuric acid that would be produced alsoneeded to be used effectively.
Production of ammonium sulfate was proposed
as a solution. Ammonium sulfate used twice as much
sulfuric acid as calcium superphosphate, and demand
saw a steep increase in the 1920s. Technology to
produce ammonia was introduced from Nitrogen
Engineering Corp. of the United States, and in
December 1930, a plant with a daily capacity of 25
tons was completed in Niihama in Ehime Prefecture. It
was the first ammonia synthesis plant in Japan to use
coke as raw material and the water gas shift reaction
method. At the same time, an ammonium sulfate plantwith an annual production capacity of 40,000 tons
was completed and went into full-scale operations
beginning in April 1931.
The New York stock market crashed in October
1929 leading to the Great Depression. As the economy began to recover, there was increased demand forconcentrated sulfuric acid in rayon, celluloid, and dyestuff industries, so sulfuric acid plants needed to be
increased. Technology was introduced from Chemical
Construction Corp. of the United States in January
1933. In March 1934, a sulfuric acid plant with a daily
capacity of 45 tons was built. One advantage of the
production method was direct production of concentrated sulfuric acid, without causing acid mist thatwould result in pollution.
In February 1934, a plant with a daily capacityof 50 tons of nitric acid (50%) was completed, andSumitomo Chemical 100 Years

Warehouse for ammonium sulfate

Completion ceremony for sulfuric acid plant

the company entered the nitric acid business. This
step was taken based on a strong request from the
Army Ministry of Japan. The Army owned the process
which produced diluted nitric acid. The nitric acid was
put through extractive distillation using concentrated
sulfuric acid to produce concentrated nitric acid. The
military needed nitric acid to make gunpowder andother items.
Changing the Company Name to Sumitomo
Chemical Co., Ltd.
In December 1933, management announced
the goal to take the company out of the confinesof the fertilizer manufacturing industry and bring it
into the chemical industry. As a part of the process,the name of the company was changed in February
1934 from The Sumitomo Fertilizer Works, Ltd. to
Sumitomo Chemical Co., Ltd. (hereinafter “Sumitomo
Chemical”). Sales of industrial chemicals were alreadyover 10% of company sales in 1930, and growth continued. The figure was 25% by 1935—it was alreadybeginning to look like a chemical company. In March
1934, it was the first Sumitomo manufacturing company to go public with stock.
In the years following, the list of chemicals
Sumitomo Chemical produced continued to grow.
Methanol and formalin were added in 1937. The technology came from Nitrogen Engineering Corp. In
June, a plant with a daily capacity of 5 tons of methanol was completed, followed in September by one
that could produce 5.5 tons of formalin a day. They
went into full-scale operation in April 1938. In July

1941, a plant was built with an annual capacity of
3,600 tons of methanol.
Trial production of urea for medical use was begun
in July 1933. In 1938, the production process waschanged to a direct synthesis of ammonia and carbon dioxide, and full-scale production began. In
August of the same year, Sumitomo Chemical, in a
fifty-fifty joint venture with Nippon Bakelite Co., Ltd.,established Synthetic Resin Industry (now Sumitomo
Bakelite Co., Ltd.) to manufacture urea formaldehyde resin. In other areas, a test plant for saltpeter
was set up in June 1939, and production facilities
for isobutanol in December 1943. From December
1942, Sumitomo Chemical borrowed facilities of Kyoto
Imperial University’s Institute for Chemical Research
for test production of buna synthetic rubber.
Production of sulfuric acid and ammonia increased
greatly going into the 1930s. The peak was in 1937,
before World War II. Production of fertilizers, chiefly
ammonium sulfate, had also been on the increase, but
as wartime controls went into place, the proportion offertilizer sales to Sumitomo Chemical total sales gradually declined. In 1942, 37% of Sumitomo Chemical’ssales were in industrial chemicals.

Net sales and proportion of industrial chemicals (1925 to 1942)(Unit: 1,000 yen)
55,000(%)
Net sales (left axis)
Proportion of industrial chemicals (right axis)

50,00035

45,00030

40,00035,00025

30,00020

25,00015

20,00015,00010

10,000
5
5,000
0

0
1925

27

29

31

33

35

37

39

41

15

4 Moving into Fine Chemicals
Japan Dyestuff Manufacturing Company was established in line with national policy to nurture the production of tar derivatives, such as synthetic dyestuffs, pharmaceuticals, and otherchemicals. Sumitomo Chemical had expanded its business activities from fertilizer manufacturing
to chemical production, and by merging with Japan Dyestuff Manufacturing, it moved into finechemicals, including dyes, pharmaceuticals, and agrochemicals.

Japan Dyestuff Manufacturing Company Kasugade Works (Osaka)

Merging with Japan Dyestuff Manufacturing
Company
Sumitomo Chemical’s fine chemicals business began with a merger with Japan Dyestuff
Manufacturing Company (JDMC) on July 1, 1944.
JDMC was the largest dyestuff company in Japan andhad capital of 30 million yen. Its plants included theKasugade Works (the current Osaka Works in Osaka),
which made mainly dyes and rubber chemicals, theTorishima Works (Osaka), devoted exclusively to manufacture of pharmaceutical products, and the Tsurusaki
Works (currently Oita Works in Oita Prefecture) for raw
materials and intermediate products for dyes, rubber
chemical products and pharmaceuticals.
Japan’s demand for synthetic dyestuffs grew alongwith the nation’s textile industry but the supply of synthetic dyestuffs was completely dependent on imports.
These imports ground to a halt during World War I.
With no tar derivatives produced in Japan such as synthetic dyes and pharmaceuticals, the prices for dyes,for example, averaged 20 to 30 times what they had
been before the war. Steps had to be taken to improve
the situation. In 1915, a law was enacted to encourageand nurture the production of tar derivatives, suchas synthetic dyestuffs and pharmaceuticals. The law
promised ten years of subsidies to manufacturing companies entering these fields.
Japan Dyestuff Manufacturing Company wasestablished based on this law, on February 25, 1916.
Construction of the Kasugade Works began in July
1916, with a gradual move into production, beginning inearly 1918.
In October 1926, the subsidies from the government came to an end. During its first decade, JDMC

16

Outline of Japan Dyestuff Manufacturing Company(Unit: 1,000 yen)Japan Dyestuff Manufacturing Company

Sumitomo Chemical

Capital30,00080,000Net sales

65,18765,188Net profit

2,998

7,122

Dividend rate

8%8%

Total assets

63,857205,183

Total liabilities

16,482

108,617Equity47,37596,566

Note: Net sales, net profit and dividend rate are for FY1943. Total assets, total liabilities andequity are as of the end of FY1943. Net sales of Japan Dyestuff Manufacturing Company is an
estimate.

was able to build up its technological capacity. By theend of 1926, JDMC had 242 dyes it had completed
research on, and seventy of them were on the market.
More than thirty were on a par with products produced
overseas.
By that time, however, pressure was mounting fromcompetition with European dyestuffs, and company
operations required fortifying. As a result, corporate
auditor Katsutaro Inabata was installed as president.
Inabata was a leading figure in the dye industry, withexperience in both importing and factory management.
He served as an auditor during the preparations toestablish JDMC, and continued in that capacity until
he became president. Inabata shifted operations to amore active private-company style, and strengthened
JDMC’s foundation by overhauling the sales systemand promoting research and development. Striving
to diversify business, in 1932, JDMC marketed thevulcanization accelerator Soxinol and the antioxidant
Antigen, anticipating growing demand for automobile
tires. In addition, JDMC moved into new businessfields including pharmaceutical products and synthetic

Sumitomo Chemical 100 Years

Interior of dyestuffs plant (Kasugade, Osaka)

sweeteners, as well as rubber chemicals. In September
1936, the Torishima Works in Osaka began producing
pharmaceuticals, and in December 1939, the Tsurusaki
Works in Oita began producing raw materials and intermediate products for dyes, etc., setting the stage for anadvance into fine chemicals.
At the request of JDMC, in 1934, Sumitomo
Chemical began to manufacture synthesized nitricacid and, in 1936, to supply tar distillates. By supplying these materials, the connection between the twocompanies grew stronger. In addition, Sumitomo Goshi
owned stock in JDMC and participated in management
by dispatching executives.
In the years following, however, as the wartime
control during World War II took over, there were great
shortages of raw materials, coal and electricity, andJDMC operations became increasingly difficult. In
1943, the number of dyes the dye industry produced
was cut to one-third, or 155 varieties, and the decision
was made to organize 200 dye companies into mainly
six major corporations. In addition, in January 1944,
JDMC failed to be designated a primary munitions
company, meaning it could no longer count on getting
a share of raw or other materials. At this point, the decision was made to merge with Sumitomo Chemical.
A Base for Fine Chemicals
Sumitomo Chemical took over three
JDMC plants: the Kasugade, Torishima
and Tsurusaki Works. In July 1944, thethree were brought under the umbrellaof the newly established Osaka Works,
which eventually became the core of thefine chemicals business, in charge of
R&D and production of medical chemicals, agrochemicals, polymer additives,
rubber chemicals, and other products.
Since the Kasugade Works began
operations, it had been producing dyes,
intermediates and dyeing auxiliaries.
Concerning dyes, the main raw materials were tar distillates from the Yahata
Steel Works, which the plant made into
intermediates and then into completed

dyes. Although the Kasugade Works was a production base for fine chemicals, such as dyes
and rubber chemicals, in the 1980s, it begana shift to research of some agrochemicals, ofpharmaceuticals, and of product safety, and it
currently plays a major role in research functionsof Sumitomo Chemical.
The Torishima Works was located about akilometer northwest of the Kasugade Works.
The all-modernized German-style factory began
operations in September 1936 as a pharmaceutical chemicals factory, the first one in Japan tomass-produce synthetic products in an integrated manner, beginning with raw materials andending with the completed product. After themerger with Sumitomo Chemical, the factory continued
to fulfill its role producing pharmaceutical chemicals
and agrochemicals, but operations were finally halted
in April 1988, closing a chapter in history.
The main purpose of the Tsurusaki Works was tomass-produce intermediate products. Partial operations began in December 1939, when production ofbeta-naphthol, aniline, and other intermediate products in mass production were moved to it from theKasugade Works. In 1962, the factory began to produce Sumithion, an organophosphorus insecticide. As
well as making an advance into active pharmaceuticalingredients, the factory is currently playing a role as a
production base for the life science chemical business.
In May 1964, the plant’s name was changed to the Oita
Works.
The Ozaki Dyestuff Chemical Works in Okayama
Prefecture had originally planned to merge with JDMC.
In August 1945, this plant was taken over by Sumitomo
Chemical, thus becoming the Osaka Works Okayama
Plant. In February 1988, it split off as an affiliate company to become Okayama Chemical, and in April 1992, it
became the Okayama Plant of Sumika Fine Chemicals
Co., Ltd. A merger with Sumitomo Chemical in July
2004 re-established the facility as the Okayama Plant.

Japan Dyestuff Manufacturing Company Tsurusaki Works (Oita)

17

5 Post-war Recovery
The manufacturing facilities in Ehime and in Osaka, including the light metal factory, wereheavily damaged in the air raids of World War II, and were forced to halt operations after the war.
Following all-out restoration efforts, the Ehime facilities were quickly restored and were producing ammonium sulfate by October 1945. The following month, the Osaka facilities began saccharin production.

View of Ehime facilities around 1947 (Source: The Mainichi Newspapers)

Dissolution of “zaibatsu” and Sumitomo Chemical
World War II ended on August 15, 1945. Sumitomo
Chemical’s factories in Osaka were devastated in the
air raids and the Ehime factories were also seriously
damaged.
One of the pillars of postwar economic reform
for Japan, as laid out by US General MacArthurand GHQ during the Occupation, was the dissolution of “zaibatsu,” the nation’s huge industrial
conglomerates. These included Mitsui, Mitsubishi,
Sumitomo, Yasuda, and others. Each was encouraged to voluntarily dismantle their organizations.
The Sumitomo Honsha headquarters submitted its
plan on November 4, 1945, and GHQ on November
6 ordered the plan to be carried out. Sumitomo
Honsha announced the following prospectus on
November 8.

Otto-style coke oven used to produce ammonia (Ehime)

18

1. Dissolution of Sumitomo Honsha, Ltd.
2. Handover of stock owned by Sumitomo Honsha
to the specified government agency
3. Resignation of Honsha executives from posts inaffiliated companies
4. Avoidance of “Sumitomo” in names of affiliatedcompanies
In keeping with this policy, Sumitomo Honsha
ended its activities and was effectively dissolved
on January 21, 1946, and Sumitomo Chemical Co.,
Ltd. changed its name to Nisshin Chemical Co., Ltd.
on February 26. In October of the same year, thestock shares owned by Sumitomo Honsha werehanded over to the Holding Company Liquidation
Commission, after which they were sold to employees
at market value.
In December 1946, Nisshin Chemical was also designated a holding company, and in February 1948, it
was ordered to reorganize in the form of multiple companies according to the Excessive Economic Power
Deconcentration Law. In the meantime, in July 1947,
GHQ had suggested separation into six companies.
The Ehime factories, the Osaka factories, the aluminum division, the Wakayama Plant and the Okayama
Plant would be independent companies and Nisshin
Chemical Co., Ltd. would be in charge of the liquidation. In the years that followed, the relationshipbetween the United States and the Union of Soviet
Socialist Republics deteriorated and the Cold War continued. In the process, the United States adjusted its
occupational policies toward Japan to hasten its economic recovery. Application of the Excessive Economic
Power Deconcentration Law was relaxed, and Nisshin
Chemical’s designation was changed in April 1949 so

Sumitomo Chemical 100 Years

Coupling dyestuff plant (Kasugade, Osaka)that it was no longer subject to the terms of the act.
This settled the reorganization issues.
The San Francisco Peace Treaty came into effectin April 1952, and in May, the government rescinded
the order abolishing all names and logos of former“zaibatsu.” On August 28, the company name waschanged back to Sumitomo Chemical Co., Ltd.

um phosphate and potassium ammonium phosphate)
was restored.
Osaka Works started up anew with the productionof saccharin, an artificial sweetener, in November
1945. Since GHQ did not allow the restoration of dye
production, the recovery of direct dyes was delayed
until January 1947. This was followed by completion offacilities for azo dyes in September and chrome dyesin April 1948. As policies on occupation shifted, in July
1950, dye production facilities with a monthly capacityof 110 tons were built and this completed the restoration of dye factories for the time being.
As for other locations, after the war, the Tsurusaki
Plant in Oita produced various intermediates for dyes ona small scale and, in February 1946, it began productionof Antigen D, a rubber chemical. At the same time, theOkayama Plant began production of sulfide dyes.

Plant Restoration
Two days after the end of the war, the ammonia
plant, the only factory in Ehime still operating at thetime, stopped all operations. Following all-out efforts
at restoration, in September 1945, ammonia production started again, followed in October by productionof ammonium sulfate using the sulfuric acid still instock and, in November, of calcium superphosphate.
In December, the sulfuric acid and nitric acid plants
were back in operation. In May 1946, plans for fundamental repairs of facilities were put into action, beginning with a new water electrolysis plant. In October ofthat year, monthly production of ammonium sulfate
reached 10,000 tons. By 1949, out of 17 plants inJapan, Sumitomo Chemical’s plant had the highest
ammonium sulfate production, at 140,000 tons per
year, and Sumitomo Chemical’s recovery in this industrial segment was complete. In December 1949, fulloperation was restored for mixed fertilizers and, in
May 1951, production of chemical fertilizers (ammoni-

Incorporating Overseas Technology and Startof Polyvinyl Chloride Business
The incorporating of technology from abroad wasenabled by the enactment in June 1950 of the laws
governing foreign capital. The laws made it possible
to receive investment from abroad as well as to send
funds overseas for technological assistance. Sumitomo
Chemical immediately (July 1950) introduced urea technology from Chemical Construction Corp. of the UnitedStates, and in June 1952, built a urea plant with anannual capacity of 12,000 tons.
In February 1951, Sumitomo Chemical concluded
a contract with American Cyanamid Co. to produce
melamine resin, which was used in textiles, leather andpaper processing, and a plant was built for this purpose at the Osaka Works in October 1952.
One fruit of research and development was the commercialization of polyvinyl chloride business, based on
research that had begun in 1946. Intermediate tests
began in January 1950 and, in July 1951, emulsion
polymerization production facilities in Ehime were completed, although the scale was small at 25 tons a month.
In April 1955, suspension polymerization was introduced
and in May 1957, monthly production capacity (including
emulsion polymerization products) reached 1,000 tons.

Production volumes for ammonium sulfate, sulfuric acid, and ammonia (1946 to 1952)

Dye production (1944 to 1951)

Ammonium sulfate annual production (left axis)
Sulfuric acid annual production (left axis)
Ammonia annual production (left axis)
Ammonium sulfate market share (right axis)(Unit: 1,000 tons)
250

(%)
20
18

200

16
14

150

(Unit: 1,000 tons)
3,000
Dye annual production (left axis)
Dye market share (right axis)
2,500

(%)
30

2,000

20

1,500

15

1,000

10

500

5

25

12
10

100

8
6

50

4
2

0

0
1946

47

48

49

50

51

52

0

0
1944

45

46

47

48

49

50

51

19

6 Moving into the Agricultural Chemicals Business
Sumitomo Chemical’s Agricultural Chemicals
Sector products include agrochemicals, such as
insecticides, herbicides, and fungicides, as well
as household insecticides. The first insecticidal
product for household use was Pynamin (allethrin). In agrochemicals, the first product wasparathion, an imported organophosphorus insecticide. Following parathion, Sumitomo Chemicaldeveloped Sumithion (fenitrothion) which
replaced parathion and was very well accepted in the market. With good sales of household
insecticides and highly safe agrochemicals, theAgricultural Chemicals Sector played an important role in the growth of fine chemicals business.

New Sumithion plant (Oita)

20

Start of the Business
The Agricultural Chemicals Sector, including thehousehold insecticides and agrochemicals, was oneof the businesses that Sumitomo Chemical newly
expanded into in the 1950s. The beginning of thehousehold insecticides business was in 1953 with thecommercial production of allethrin. Allethrin is oneof the “pyrethroids” which has a similar structure topyrethrin, the active insecticidal component in pyrethrum (a variety of chrysanthemum traditionally used
as an active ingredient for insecticides). Sumitomo
Chemical succeeded in synthesizing allethrin in
1949. With manufacturing approval by the Ministryof Welfare in August 1953, Sumitomo Chemicallaunched allethrin, named Pynamin, for mosquito
coil use. Unfortunately, Pynamin was not accepted
well due to its color and smell that were different
from the natural ingredient pyrethrum. In 1954, oncemass-production of mosquito coils began, Pynamin
was widely adapted as one of its active ingredients. In
1955, a shortage of pyrethrum led to its sudden priceincrease, and Pynamin was getting recognized for its
stable price compared with the natural ingredients.
The first step into the agrochemical business was
taken in February 1953, when Sumitomo Chemicalbegan to import and sell parathion, an organophosphorus insecticide, produced by American Cyanamid
Co. (ACC). Parathion was effective on rice-stem bor-

Pynamin plant (Torishima, Osaka)

Parathion plant (Oita)

Sumitomo Chemical 100 Yearsers and other pests in rice, fruits and vegetables.
Sumitomo Chemical thus expected good demand
for this product in the Japanese market. For its production in Japan, Sumitomo Chemical signed license
agreements with ACC (ethyl parathion) and Bayer AG(methyl parathion). In February 1954, an ACC ethyl
parathion production facility was built at the Tsurusaki
Works in Oita, followed in March 1955 by anotherfacility producing both methyl parathion and ethyl
parathion.
Also in February 1954, Sumitomo Chemical started imports and sales of malathion, an organophosphorus insecticide from ACC. Production of the technical grade began in August 1955. Malathion wasused as an insecticide for fruit trees and rice. Making
use of malathion’s characteristics as low toxicity andgood efficacy on flies, mosquitoes and cockroaches,in 1958, premium malathion was developed targeting
insect-borne disease prevention and pest control inlivestock raising.
Development of Major Agrochemical Products
In the field of agrochemicals, Sumitomo Chemical
not only began the production of in-licensed chemicals
in Japan but also developed a new organophosphorus insecticide, Sumithion. In August 1959, Sumitomo
Chemical applied for patents in Japan and overseas
countries. Sumithion had excellent, long-lasting effects
and it was much less toxic than parathion. In November
1961, a 150-ton-per-month production facility of
Sumithion was completed at the Tsurusaki Works, andSumithion was launched in April 1962.
In the mid-1960s, the regulations on agrochemicalsafety in Japan became stricter, and in June 1971, theuse of parathion was banned. It was at this point that
Sumitomo Chemical began promoting a switchoverto Sumithion from parathion and pioneered its use forfruit, vegetable, and tea crops. Sumitomo Chemical
actively expanded into overseas markets as well. By
the end of the 1960s, Sumitomo Chemical was pro-

Net sales of Agricultural Chemicals Sector (1953 to 1985)(Unit: Billions of yen)
70
60

Net sales of Agricultural Chemicals Sector (left axis)
Proportion of Agricultural Chemicals Sector (right axis)

(%)
10
9
8

50
40

7
6
5

30
20

4
3
2

10
0
1953 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85

Note: Proportion is to total Sumitomo Chemical sales

10

moting the use of Sumithion in more than 50 countries. This resulted in a broadly expanded demandfor Sumithion; from 1966 to 1969, yearly production
capacity grew from 2,000 to 5,000 tons.
The next bestselling agrochemical to Sumithion
was Sumicidin, which was launched overseas in April
1976. Sumitomo Chemical was the first company inthe world to develop a pyrethroid without a cyclopropane ring structure, and it had excellent effects
on pests on cotton plants. It was a hit product, with
exports achieving net sales of 13 billion yen in 1980.
In Japan, Sumitomo Chemical developed a combination product of organophosphorus insecticide and
Sumicidin. In April 1983, Permathion and three otherproducts were launched for fruit and vegetable crops.
In the field of fungicides, Sumitomo Chemicaldeveloped Sumilex and began selling it overseas inDecember 1976. The product was used to prevent
botrytis cinerea in vegetables, grapes and other fruits.
It was a major product, and in 1981, sales volume inJapan and overseas countries exceeded 500 tons.
Getting into Full-scale Household Insecticides
By 1962, natural pyrethrum in mosquito coils had
be e n re place dby Pynaminand its demand
increased dramatically. Whenused in aerosol
products, though,its knock-down
efficacy was inferior to pyrethrin,
the active ingredie nt in py re thrum. T hus a
View of Misawa Works (Aomori)fast-acting pyrethroid compound
was developed and, in March 1965, launched under
the name of Neo-pynamin. Subsequently, in 1973,
Pynamin Forte was developed, with double efficacy to
Pynamin on pests. In 1976, Sumithrin was developed
as killing agent against flies and mosquitoes, and in
1989, Etoc was developed for wide use in mosquito
coils, electric mosquito repellents, aerosols and otherproducts.
To respond to expanded demand for pyrethroids,
the Misawa Construction Division was established in
March 1975 to build a new plant on an industrial complex in Misawa City, Aomori Prefecture. Operations
began in January 1978 and the first release of Neopynamin and Pynamin Forte was realized in March.
The Misawa Works became the main factory ofpyrethroids for Sumitomo Chemical. It realizes newtechnologies, such as practical application of opticalresolution, as well as launches many products newly
introduced to the market and leads the growth of thehousehold insecticides business.

21

7 Growth of the Pharmaceuticals Sector
Sumitomo Chemical’s Pharmaceuticals Sector began to expand through tie-ups and joint
ventures with overseas corporations. The synthetic pharmaceutical technology of Sumitomo
Chemical was demonstrated through the development of new production methods for indometacin and diazepam. New pharmaceuticals, such as neuropsychiatric and cardiovascular drugs aswell as anti-inflammatory analgesics, were launched one after the other.

View of Ibaraki Plant (Osaka)

Postwar Restart
The Torishima Plant for pharmaceutical production was completely destroyed during the war.
Reconstruction was energetically undertaken to
resume operations and full-scale restoration of operations was completed in 1949. The plant produced new
drugs, such as Anergen (an antihistamine), Tonopron(an antihypertensive), and Uronamine (a urinary tract
antiseptic).
In 1950, the Torishima Plant began to produce
para-aminosalicylic acid (PAS), an antituberculosis
drug. Sumitomo Chemical launched methionine (asynthetic essential amino acid) as a drug listed in
the official Pharmacopoeia of Japan, and began tosupply it for use in multivitamin supplements in 1951.
Sumitomo Chemical had also some OTC (over-thecounter) drugs such as Dan that was a popular cold
remedy containing antihistamine, and U-Von that
was an anti-aging/nutritional drug. In May of 1958,
Tespamin, an antitumor medication, was produced
using advanced technology that drew attention overseas and Sumitomo Chemical’s first international
licensing in the pharmaceuticals area was made to
American Cyanamid Co. in 1960.
Joint Ventures with Overseas Corporations
Sumitomo Chemical’s first joint venture with anoverseas corporation came in June of 1959 when thecompany established Japan Upjohn Ltd. with Upjohn
Corp. of the United States. Sumitomo Chemical took
a 45% stake in the new company’s capital stock, 20
million yen. Before that, in 1953, Sumitomo Chemical
formed a tie-up with Upjohn to import cortisone (oneof the corticosteroids) products. After Japan Upjohn
was established, Sumitomo Chemical moved the22sales of Upjohn products, some of them were manufactured by Sumitomo Chemical, to this joint venturecompany. Sumitomo Chemical withdrew its investment in Japan Upjohn in December 1994.
In July 1959, Sumitomo Chemical signed a contract with Imperial Chemical Industries Ltd. (ICI) of
the United Kingdom to import the antiseptic Hibitane.
ICI and Sumitomo Chemical already had a strong
relationship based on the introduction of polyethylene technology (1955), and this new tie-up took thetwo companies also into the pharmaceutical field. In
1974, products from ICI reached 20% of Sumitomo
Chemical’s pharmaceutical net sales. Sumitomo
Chemical and ICI in July 1974 further embarked
upon a joint venture, ICI Pharma Ltd., which theyfinanced in equal parts (600 million yen capital).
In November 1993, ICI Pharma changed its nameto Zeneca Yakuhin and, in October 2000, mergedwith AstraZeneca K.K. (20% owned by Sumitomo
Chemical), the Japanese affiliate of AstraZeneca of
the United Kingdom. Subsequently in 2014, Sumitomo
Chemical sold its 20% shareholding of the joint venture to AstraZeneca.
Nihon Medi-Physics Co., Ltd., a joint venture
between Sumitomo Chemical and Medi-Physics Inc.
of the United States, was established in March 1973,
to market diagnostic drugs that use radioisotopes(capital 200 million yen, 45% owned by Sumitomo
Chemical). Medi-Physics’ shares were taken over by
Nippon Roche in March 1975. In December 1994,
Nippon Roche terminated its participation and the
new capital investor became Amersham Internationalplc of the United Kingdom. The latter was acquired by
GE Healthcare UK Limited, which took over the sharesof Nihon Medi-Physics in April 2004. (Since October

Sumitomo Chemical 100 Years

1996, Sumitomo Chemical has owned 50% of theshares.)New Business Division for Pharmaceuticals
Sumitomo Chemical established a business division for pharmaceuticals in July 1961 with the aimof modernizing the field. Until then, the businesshad been divided among department managers foradministration, manufacturing, research, etc. locatedat the head office, the Tokyo branch office and the
Osaka Works, but the creation of the new division
made it possible to integrate the pharmaceutical business under one division head.
The Japanese pharmaceutical industry enjoyedbrisk demand, mainly owing to the introduction ofJapan’s National Health Insurance scheme in April
1961 and health care coverage for the country
increased dramatically. Between 1960 and 1963,
Sumitomo Chemical experienced rapid growth inpharmaceuticals with percentage sales gains in the
20s and the 30s. The range of products also expanded and diversified. To keep up with its burgeoning
business, Sumitomo Chemical increased its production capacity by constructing the Ibaraki Plant (Ibaraki
City, Osaka) in 1962.
Sumitomo Chemical conducted R&D and the production of pharmaceutical products, and the marketing was assigned to Inabata & Co., Ltd. (exclusive distributor). In order to attain further efficiencies in market needs assessment, sales planning and inventory
management, in February 1967, Sumitomo Chemical
and Inabata integrated sales administration and inventory control, making it possible for both companies
to coordinate more effectively and for Sumitomo
Chemical to undertake rational production planning.
Developing Methods to Produce Indometacin
and Diazepam
During the latter half of the 1960s, two products

were developed that evidenced the value of Sumitomo
Chemical’s drug synthesis technologies. One was
the non-steroidal anti-inflammatory drug Inteban(indometacin) launched in March 1967 and the otherwas the anxiolytic Serenzin (diazepam) launched in
November 1968.
Indometacin was developed by Merck & Co., Inc.
of the United States and globally accepted as a treatment for rheumatoid arthritis. Sumitomo Chemical
was able to develop its own production method forthe drug, achieving superior cost performance. When
Merck & Co. realized Sumitomo Chemical’s revolutionary production methods of indometacin, Merck &Co. asked and was granted a license to use the patented process with the payment of US$ 3 million (1.08
billion yen) in May 1967.
Sumitomo Chemical also developed a new excellent production method for diazepam, one of the benzodiazepines, and was able to export this technology.
In September 1970, the Swiss company F. HoffmannLa Roche AG paid US$1.6 million (570 million yen) for
permission to use the patent to produce benzodiazepine compounds.
Robust Sales Growth
Pharmaceutical sales were flat in the late 1970s,
around 30 billion yen, but increased dramatically fromthe beginning of the 1980s. Sales reached 53.1 billion
yen in 1983, meaning sales were 41 times larger thanthat in 1955, the beginning of Japan’s rapid economic
growth era.
Rapid growth in the 1980s can be attributed to thesuccess of Sumitomo Chemical’s original researchand development: psychoneurologic drugs, cardiovascular medications, and anti-inflammatory analgesics. Specifically, in 1979, Abilit, an antipsychotic drug
to treat schizophrenia, was launched. It was followedby Inteban ointment (a transdermal non-steroidal
anti-inflammatory drug) in 1980, the anxiolytic Erispan
and the lipid-lowering drug Lipoclin in 1981.

Net sales of Pharmaceuticals Sector (1950 to 1984)(Unit: Billions of yen)
60
Net sales of Pharmaceuticals Sector (left axis)
Proportion of Pharmaceuticals Sector (right axis)
50

(%)
9
8
7

40

6

Advertisements for Dan and U-VON
5
30
4
20

3
2

10
1
0

0

1950 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84

Higashi Yodogawa Plant in Osaka for formulation (1947-1962)

Note: Proportion is to total Sumitomo Chemical sales

23

8 Entering the Field of Petrochemicals
In 1958, Sumitomo Chemical completed
one of the first ethylene plants in Japan—Ehime
Prefecture—thus advancing into the field of petrochemicals. This business was further expanded witha subsequent plant in Chiba Prefecture that wascapable of large-scale ethylene production and thelaunch of a wide range of derivative products.

Ethylene plant (Ehime)

Production of Ethylene and Derivatives
The first petrochemical products were producedin the United States in 1920. Japan’s petrochemicalindustry got its start thirty-seven years later, in 1957.
By this time, Western countries had enormous petrochemical industries in place. Japan’s Ministry ofInternational Trade and Industry took the lead in making plans to catch up as quickly as possible.
In the first phase of Sumitomo Chemical’s petrochemical business plan, the primary objective was the
production of polyethylene. In July 1955, Sumitomo
Chemical contracted with Imperial Chemical Industries
Ltd. (ICI) of the United Kingdom to introduce the technology to produce low-density polyethylene. For ethylene, the technology of Stone & Webster Engineering
Corp. of the United States was introduced in March
1956. In 1958, plants were completed in Ehime
Prefecture. The ethylene plant had an annual capacity of 12,000 tons, and the polyethylene plant had acapacity of 11,000 tons.
During the second phase of Sumitomo Chemical’s
petrochemical business plan, annual ethylene production capacity reached 87,000 tons (August 1964)
by capacity expansion. Additionally, an ethylene plantwith an annual capacity of 40,000 tons was built in
Ehime in January 1966, and this boosted polyethylene
production capacity to 100,000 tons a year.
For propylene derivatives, Sumitomo Chemical
introduced the polypropylene technology ofMontecatini of Italy, and in November 1962, facilities
with an annual capacity of 6,500 tons were completed. As demand for films and molded products
increased, by April 1967, polypropylene production

24

Japan ethylene production (1958 to 1973)(Unit: 1,000 tons)
4,500
4,000

Ethylene annual production

3,500
3,000
2,500
2,000
1,500
1,000
500
0
1958

61

64

67

70

73

Source: A booklet issued by Japan Petrochemical Industry Association

capacity had increased to 30,000 tons. A joint venturewith the US Rubber Company in August 1963 resulted
in Sumitomo Naugatuck Co., Ltd. (capital 955 million
yen, 51% owned by Sumitomo Chemical). This took
Sumitomo Chemical into the field of acrylonitrile butadiene styrene (ABS) resin.
Acrylonitrile is used to make synthetic fiber, and in
January 1959, a plant to produce acrylonitrile using
acetylene process was completed in Ehime. Later,
Sumitomo Chemical switched to the Sohio process,which uses propylene and ammonia as raw materials,
when a plant with an annual capacity of 15,000 tons
was completed in September 1964. In September
1963, aiming to produce caprolactam (an intermediateof nylon), Sumitomo Chemical formed Japan Lactam
Ltd. (capital 900 million yen) with Teijin Ltd. and Kureha
Spinning Co., all three contributing equally. In April
1965, a plant was built that could produce 18,000 tons

Sumitomo Chemical 100 Years

Polyethylene plant (Ehime)a year. Production of the by-product ammonium sulfate
came to over 52,000 tons a year, which led to a reduction in the total costs of production of ammonium sulfate for Sumitomo Chemical. By March 1968, production capacity of caprolactam was increased to 40,000
tons a year and Sumitomo Chemical, at the same time,
became self-sufficient in cyclohexane, the raw material
for caprolactam, with the construction of a plant for
cyclohexane. Ahead of this event, in May 1967, a new
BTX (benzene, toluene, and xylene) plant in Ehime
was added to produce raw materials for cyclohexane,
alkylbenzene for synthetic detergent, TDI—the material
used to make urethane—and other products.
A Petrochemical Complex in Chiba
When the new phase of the government’s petrochemical plan began in 1965, approval standards set
by the government required new ethylene production
plants to have production capacity of at least 100,000
tons a year. In April 1965, Sumitomo Chemical submitted
plans for a petrochemical complex in Chiba that included an ethylene plant with annual production capacity of
120,000 tons. With the aim of achieving efficient operations at the new plant, Sumitomo Chemical decided itshould be operated as a separate company. Sumitomo
Chiba Chemical Co., Ltd. (capital 1 billion yen) was established in November 1965 as a 100% subsidiary company.
(It merged with Sumitomo Chemical in January 1975.)
Toward the planned annual production capacity of ethylene of 120,000 tons, Sumitomo Chemical in April 1967
constructed plants with a total annual capacity of 70,000
tons and by November 1968, all of the facilities werecompleted, enabling the targeted production capacity of
120,000 tons.
Meanwhile, the world was experiencing a petrochemical boom. New ethylene plants were planned or constructed, most on a large scale of 300,000 to 500,000
tons. In June 1967, government approval standards for
new ethylene plant capacity increased to 300,000 tons.
In January 1970, Sumitomo Chiba Chemical and Tonen
Sekiyu Kagaku, on a rotating investment basis following
the administrative guidance of the government, built an
ethylene plant in Chiba that had an annual capacity of
300,000 tons. This gave Sumitomo Chiba Chemical a
total capacity of 420,000 tons. When the capacity of
the Ehime facilities was added, the annual capacity was
531,500 tons.
Looking at the main derivatives, by January 1972,

Sumitomo Chiba Chemical’s production capacity of polyethylene increased to 130,000 tons. Production capacityof polypropylene increased to 90,000 tons by the end of
1970. Using ethylene instead of acetylene to make polyvinyl chloride, the process created a brisk demand for
ethylene. Polymerization facilities constructed in October
1967 had a production capacity of 20,000 tons of polyvinyl chloride a year. Additional facilities built in August1970 had a production capacity of 30,000 tons, for a
total 50,000-ton capacity. In December 1969, Sumitomo
Chemical, Denki Kagaku Kogyo (DENKA), and three othercompanies established Chiba VCM Co., Ltd. (capital 300
million yen, with Sumitomo Chemical owning 28%). In
January 1971, the company constructed a plant with anannual capacity of 160,000 tons of vinyl chloride monomer. The product was provided to its shareholding companies.
In October 1968, facilities to produce styrene monomer were completed. To supply the facilities with thenecessary raw material, benzene, a BTX plant was built in
September of the same year.
More plants were added for new fields: EPDM (ethylene propylene diene methylene linkage) in November
1969, SBR (styrene-butadiene rubber) in August 1971,
and EVA (ethylene-vinyl acetate) emulsion in January
1970.
In the petrochemical industry, new facilities withlarge capacities were built to increase global competitiveness. To this end, Sumitomo Chemical andnine other companies established Higashi-Nihon
Methanol Co. in September 1968 (capital 500 million yen, Sumitomo Chemical 50% shareholder). In
November of that same year, Sumitomo Chemical,
Seitetsu Kagaku Co., Ltd., Showa Denko K.K., andNissan Chemical Industries, Ltd. established Nihon
Ammonia Co., Ltd. (capital 1 billion yen, Sumitomo
Chemical 28% shareholder). In April 1971, the company built the largest ammonia plant in the world, with acapacity of 1,550 tons a day.

Start-up ceremony for ethylene plant in Chiba

BTX plant and styrene monomer plant (Chiba)25

9 Dealing with the Oil Crises
In the 1970s, the Japanese petrochemical industry was hit hard by two oil crises. In 1983,
Sumitomo Chemical ceased the production of most petrochemicals in the Ehime Works and relocated the production to the Chiba Works, where Sumitomo Chemical had newer and more efficientfacilities. At the same time, Sumitomo Chemical disposed of redundant facilities, based on the
Designated Industries Structural Revision Extraordinary Measures Law (Industry RestructuringLaw). It was a difficult period of restructuring and Sumitomo Chemical did everything it could tosurvive.

Chiba Works

Measures for Business Improvement
In October 1973 when the first oil crisis hit, Japan wasin the most severe position of all the developed countries
because it depended on the Middle East for 82% of its
petroleum. Before the crisis, the market price of crude oil
was US$2.63 a barrel. By January 1974, it was four times
as expensive at US$10.46. Consumer prices increased by
21.8% year-on-year. Costs rose for almost all industries.
The situation was serious. Beginning in the fall of 1974,
there was a rapid increase in corporate bankruptcies,
temporary layoffs, workforce reductions, and salary cuts.
Japan’s petrochemical industry had its era of rapid growththanks to the low price of petroleum, and now it faced an
unprecedented emergency situation as profits deteriorated.
In 1975, Sumitomo Chemical’s profitability was weakened
as high cost of petroleum necessitated additional operating
funds, resulting in higher financing charges that burdened
earnings.
In the midst of the crisis, Japanese manufacturers did
their best to save energy and cut operating costs. In 1974,
Japan’s GDP recorded negative growth of 0.6% but it
recovered to 2.9% in 1975, and followed with a period ofGrowth of Japanese economy and import price of crude oil (CIF) (1972 to 1984)(%)
30(1,000 yen/k )60

Import price of crude oil (right axis)
Nominal growth rate (left axis)
Real growth rate (left axis)

25

50

20

40

15

30

10

20

5

10

0

0
1972

75

78

81

-5
Source: 1999-2000 Yearbook of Energy Sources, supervised by Agency
for Natural Resources and EnergyLong-term Economic Statistics (1999), Cabinet Office

26

84

stable growth, 4 to 5% increases, from 1976 to 1979.
Then the second oil crisis hit in January 1979. In April
1980, the posted price of crude oil had leaped to US$28 abarrel. Sumitomo Chemical had just succeeded in recovering from the impact of the first crisis when, in FY 1981, it
once again experienced weakened profitability and, in FY
1982 registered large losses.
In the midst of the recession, Japanese manufacturingindustries were doing their best to conserve energy andcut costs. Up to the oil crises, the manufacturing industry had invested heavily in new facilities to meet risingdemand. When demand cooled off, industries were facedwith an excess of production facilities. Materials industries, etc., dependent on large amounts of energy, found it
difficult to restructure with the remainder of Japan’s economy. While the Japanese economy experienced a gentle
recovery, beginning in 1975, many of the energy-dependent industries were unable to keep pace. In May 1978,
the Temporary Measures for Stabilization of Specified
Depressed Industries Law went into effect to allow industries suffering from the recession to recover by disposingof facilities and forming “rationalization cartels.” Some of
the industries that were included were open-arc furnaces(steel making), aluminum smelting, synthetic fiber, andshipbuilding. In addition, in May of 1983, the DesignatedIndustries Structural Revision Extraordinary Measures
Law (Industry Restructuring Law) was introduced andapplied to industries such as electric furnaces (steel making), aluminum smelting, synthetic fiber manufacturing,chemical fertilizer manufacturing, petrochemical production, and others. Consequently, it affected Sumitomo
Chemical’s aluminum smelting, chemical fertilizer, andpetrochemical businesses.
In September 1977, Sumitomo Chemical formulated
its own measures for total improvement of business, andbegan to work on the following five areas.
(1) Reorganization of business fields and consolidationof facilities(2) Streamlining of organization(3) Cutting of labor costs(4) Energy conservation

Sumitomo Chemical 100 Years(5) Rationalization of research divisions
Of these, (1) had already been accomplished in July
1976 for the aluminum business by forming a separate
company, so the focus this time was on the petrochemical
field. As for (3), from 1975 to 1983, personnel costs were
cut in four phases of restructuring, which entailed dispatching employees to other companies, leaving positionsof retired employees unfilled, and controlling the numberof new hires. Unfortunately, these large-scale personnel
reduction efforts were not sufficient, and from November
1982 to February 1983, an early retirement program had
to be implemented. The result was that the workforce
was reduced by 7,400 employees. 15,210 employees(not including those assigned to other companies) at theend of 1975 were reduced to 7,803 by the end of 1983.
Concerning (4), energy conservation plans were pursued
in three stages from 1977 to 1984 and an aggregate totalof 44% reduction in energy was achieved, compared withthe enegy consumption volume of 1976.
Concentrating Petrochemical Manufacturingin Chiba and Continued Rationalization
With the aim of integrating the petrochemical business, Sumitomo Chemical merged with Sumitomo Chiba
Chemical Co., Ltd. and launched the Chiba Works in
January 1975. Since the policy for business restructuring
was “establishing the optimal manufacturing system,” production was concentrated at the Chiba Works.
Specifically, along with the closing of the Chiba No. 1
Ethylene Plant (October 1976, annual production capacityof 130,000 tons), Sumitomo Chemical also closed the No.
2 Ethylene Plant at the Ehime Works (annual production
capacity of 65,000 tons) because output was small andthe facilities were aging. On the other hand, in December
1977, Sumitomo Chemical decided to increase the production capacity of the Chiba No. 2 Ethylene Plant from
300,000 tons a year to 330,000 tons. As for polyethylene,of the three production lines at the Ehime Works, No. 1
and No. 3 plants stopped producing a total of 40,000 tons
and as a result, total production capacity at the Chiba
and Ehime Works was reduced to a total of 205,000 tons.
Additional capacity for ethylene at the Chiba Works wascompleted in November 1978, and the facilities at the
Ehime Works ceased production in April 1979.
In June 1983, disposing of the ethylene facilities
according to the Industry Restructuring Law was decided,and all Sumitomo Chemical facilities at the Ehime Works
and part of the facilities at the Chiba Works, a total of
224,400 tons, were planned to be scrapped. In January

1983, the Ehime Works had already stopped productionof ethylene, its derivatives and BTX in accordance with thepetrochemical business restructuring and rationalization
plan of October 1981. After this, the production of ethylene
and its main derivatives was concentrated at the Chiba
Works.
As for polyvinyl chloride, in October 1981, agreements
were made among seventeen companies to form fourgroups, with each establishing a joint-sales company
to handle its sales. Approval of the Japan Fair Trade
Commission for this arrangement was received in March
1982, and Sumitomo Chemical, Kureha Chemical Industry
Co., Ltd., Sun Arrow Chemical Co. and Zeon Corporation
established Dai-Ichi Vinyl Sales Corporation (capital 90
million yen, 25% owned by Sumitomo Chemical). In addition, in June 1983, under the Industry Restructuring Law,
excess facilities were scrapped. Of the reactor volume of
686m3 owned by Sumitomo Chemical, 193m3 at the Ehime
Works were scrapped.
In June 1983, polyolefin (polyethylene and polypropylene) was also specified under the Industry Restructuring
Law. Seventeen companies producing polyolefin set up
four joint-sales companies. Sumitomo Chemical, with
Ube Industries, Ltd., Toyo Soda Manufacturing Co.,
Ltd., Chisso Corporation, Tokuyama Soda Co., Ltd., andNissan Maruzen Polyethylene Co., Ltd. established Union
Polymer Co., Ltd. (capital 400 million yen, 18% owned
by Sumitomo Chemical) in June 1983. The scrapping ofexcess facilities continued. Sumitomo Chemical disposedof 96,000 tons of polyethylene facilities at the Ehime
Works and 26,000 tons at the Chiba Works.
Concerning ammonia and methanol, Japanese products, which depended on naphtha and other petroleum-based materials, lost their competitiveness both inJapan and abroad to foreign products that used lowpriced natural gas as a raw material. In 1976, operations at
Nihon Ammonia Co., Ltd. were stopped and the company
was liquidated in December 1981. Ammonia production
was discontinued at the Ehime Works in November 1985,
and Higashi-Nihon Methanol Co. Ltd. was liquidated inJune 1984.
Facility processing according to Industrial Restructuring Law (1983)(unit: 1,000 tons)

All-Japan
Facility capacity

Sumitomo Chemical

Capacity
eliminatedFacility capacity

Capacity
eliminatedEthylene

6,347

2,031

569

224

Polyvinyl chloride

2,010

450

686m3

193m3

Polyethylene

2,755

850

286

122

Note: Polypropylene was excluded from capacity elimination

Higashi-Nihon Methanol Co., Ltd. (Chiba)

Nihon Ammonia Co., Ltd. (Chiba)27

10 Rise and Decline of Aluminum Business
The production of aluminum increased during the wartime years when there was military demand.
Thereafter, the business expanded greatly during the period of rapid economic growth in Japan thanks to private demand. The two oil crises, however, dealt the aluminum industry a fatal blow because they led to a sharp
rise in the price of electricity. Sumitomo Aluminium Smelting Co., Ltd. stopped all business activity in 1986.
After that, Sumitomo Chemical began to import aluminum ingots produced by overseas projects in which
Sumitomo Chemical participated and to function as an aluminum supplier, actively developing business in finealumina, high-purity alumina, and high-purity aluminum. Even today, the businesses stemming from aluminum
form one of the pillars of the Basic Chemicals Sector.

Soederberg-style electrolytic furnaces (Ehime)

Start of Aluminum Business
Sumitomo Chemical first entered the aluminumbusiness in 1932, when Sumitomo Goshi Kaisha commissioned Sumitomo Chemical to conduct a trial
production of alumina, the main raw material for aluminum. The objective was to confirm the technology
required to make alumina from alunite. Based onthese trials, Sumitomo Chemical developed its own
alumina manufacturing method.
In June 1934, Sumitomo Goshi Kaisha and Asada
Alum Manufacturing Goshi Kaisha jointly established
Sumitomo Aluminium Smelting Co., Ltd. (capital 10
million yen, 75% owned by Sumitomo). Located in
Ehime, Sumitomo Aluminium Smelting began bybuilding a first-stage plant that could produce 1,500
tons a year. Operations began in February 1936.
Along with alumina, Sumitomo Chemical aimed tosupply cryolite used for aluminum smelting, and inJune 1936, it completed a cryolite plant that could
produce 300 tons a year.
The alumina made from alunite, however, wasof poor quality and the cost was high. In June 1937,
Sumitomo Chemical switched to the Bayer process,which made alumina from bauxite. In February 1938,
production began on a scale of five tons a day. In

January 1939, production capacity had increased to4,500 tons a year.
Military demand for aluminum increased, including
a need for airplane production. Sumitomo Aluminium
Smelting built a second factory in March 1940 withan annual production capacity of 8,000 tons, and athird one in September 1942 with a capacity of 10,000
tons. To drastically reform the system of producing
aluminum from bauxite in an integrated manner, themanaging of the operation of Sumitomo Aluminium
Smelting was assigned to Sumitomo Chemical in June
1944.

Alumina deposition tanks (Ehime)28

Sumitomo Chemical 100 Years

Net sales of aluminum division(Unit: Billions of yen)
120

(%)
25

Net sales of aluminum division (left axis)
Proportion of aluminum division (right axis)

100

20

80
15
60
10
40
5

20

0

0
1950

52

54

56

58

60

62

64

Business Expansion During the Period of Japan’s
Rapid Economic Growth
After the war, the production of aluminum did notstart until July 1948, two months after bauxite-to-alumina production finally resumed in May 1948. In August
1949, plans to rebuild facilities were approved and,in November, Sumitomo Chemical acquired all of the
facilities of Sumitomo Aluminium Smelting.
In 1950, after war broke out in Korea, it brought
about a temporary economic boom in Japan, which
increased the production of aluminum. Additionallyaround that time, new aluminum applications, such as
materials for buildings, trains and ships, were developed and they gradually increased the demand foraluminum in Japan. Beginning in the latter half of the
1950s, the period of Japan’s rapid economic growth
resulted in dramatic leaps forward in the aluminumbusiness. From 1955 to 1970, annual net sales of aluminum surged from 2.7 billion yen to 49.8 billion yen,
an average annual growth of 21.4%.
In July 1961, a plant was built in Nagoya (Nagoya
Works) at the request of Sumitomo Metal Industries,
Ltd. Sumitomo Light Metal Industries, Ltd. acquired
the aluminum rolling division of Sumitomo Metal
Industries, so Sumitomo Chemical’s plant was built on

66

68

70

72

74

Note: Proportion is to total Sumitomo
Chemical sales.
As of Nov. 1976, the business wastransferred to Sumitomo Aluminium
Smelting Co., Ltd.

76

land adjoining that of Sumitomo Light Metal Industries
to supply it with aluminum that had been smelted. The
Nagoya Works, with a first-phase capacity of 15,000
tons per year, began production in August 1961. All of
the facilities were completed in December 1964, providing an annual production capacity of 46,500 tons.
Subsequent plans were for an aluminum plant witha 68,000-ton annual capacity to be built in Isoura in
Ehime Prefecture. In June 1967, the first-phase facilities were built with an annual production capacityof 17,000 tons. All of the Isoura Plant facilities werecompleted in November 1969. They were capableof producing 76,000 tons a year. The result was that
Sumitomo Chemical’s annual production capacity had
expanded to 156,000 tons, and Sumitomo Chemical
was still struggling to meet demand.
To keep pace with demand, Sumitomo Chemical
obtained 330,000m2 of land in the Toyama-shinko
Seaside Industrial Zone in September 1968 to build aplant that could produce 168,000 tons of aluminum a
year. In February 1970, the first half of the first-phasefacilities of the Toyama Works began operation at
28,000 tons a year. In October 1973, 180,000-ton-ayear facilities were completed.
To prepare for growing demand, in February 1970,
the decision was made to construct a plant with anannual capacity of 300,000 tons in Toyo in Ehime
Prefecture. In March 1975, the first half of the firstphase facilities with an annual capacity of 50,000 tons
was completed. A prominent feature of this factory
was the world’s largest pre-baked-style electrolytic
furnace, operating on 175,000 amperes. The furnace
was developed by Sumitomo Chemical. The second
half of the first-phase facilities was completed in April
1976, providing an annual capacity of 100,000 tons
in total. The plant was operated by Sumitomo Toyo
Aluminium Smelting Co., Ltd. (capital 3 billion yen,
100% owned by Sumitomo Chemical), established in

Looking at the alumina plant from the bauxite storage area (Ehime)29

Sumitomo Toyo Aluminium Smelting Co., Ltd.

August 1974.
End of Domestic Smelting After Oil Crises
Sharp rises in the price of electricity due to the oilcrises had a direct impact on the cost of producing
aluminum, which was heavily dependent on electricity
for its production. The Japanese aluminum smelting
industry lost international competitiveness, turning itfrom a growth industry into a depressed industry withan excess of inventory and facilities.
Operation of the Toyama Works third-phase facilities (completed in October 1973) was postponed.
Sumitomo Chemical reduced aluminum production
by 25% in November 1974 and lowered the operating
rate to 65% in February 1975. The major portion of the
facilities of Sumitomo Toyo Aluminium Smelting, completed in March 1975, failed to even begin production.
In the midst of this difficult environment, Sumitomo
Chemical separated its aluminum business into anindependent entity, establishing Sumitomo Aluminium
Smelting Co., Ltd. in July 1976. The combined production capacity of Sumitomo Aluminium Smelting
and Sumitomo Toyo Aluminium Smelting was 414,000
tons a year, the largest in Japan and the seventh highest in the world.
Japanese aluminum production reached a record
high in 1977, and began its decline in 1978 as cheap
imports flooded the market. In 1978, the aluminum
industry created its first rationalization cartel according to the Temporary Measures for Stabilization ofSpecified Depressed Industries Law, and Sumitomo
Aluminium Smelting drastically reduced production.
In January 1979, after the second oil crisis, a stabilization plan was announced based on the Temporary
Measures for Stabilization of Specified Depressed
Industries Law, and aluminum electrolytic furnaces
with total production capacity of 530,000 tons were
decided to be scrapped. In March 1979, Sumitomo
Aluminium Smelting closed all of its Nagoya Works
facilities and part of its facilities at the Toyama Works.
In January 1981, Sumitomo Aluminium Smelting
merged with Sumitomo Toyo Aluminium Smelting. The
new company, with the name Sumitomo Aluminium
Smelting Co., Ltd., had capital of 18 billion yen (50%
owned by Sumitomo Chemical).
The strained circumstances of the aluminum
smelting industry continued. In March 1982, the operations at the Isoura Plant were discontinued, followed by the Toyo Plant (the former Sumitomo Toyo
Aluminium Smelting) in December 1984. In July 1986,
Sumitomo Chemical decided to withdraw from all
domestic aluminum smelting and in October stopped
the operations at the Toyama Plant. This was the lastplant operated by Sumitomo Aluminium Smelting, andthe company was liquidated in December 1986.
The Asahan Project and Imports of Aluminumfrom Overseas Projects
Except for one aluminum smelting company run onhydroelectricity it generated itself, all aluminum smelting in Japan had disappeared by 1987. In contrast,
concerning overseas production, Sumitomo Chemical

Opening ceremony for P.T. Indonesia Asahan Aluminium

Sumitomo Chemical’s aluminum smelting operations (1979 to 1986)(Unit: tons)

Mar. 1979
Nagoya Works

Mar. 1982

Facilities not in operation

Remaining capacity

52,7960Isoura Plant

78,980Toyo Plant

98,712

Facilities not in operation

Remaining capacity

Facilities not in operation

Oct. 1986

Remaining capacity

Facilities not in operation

Remaining capacity

82,917

82,917

082,917

82,9170

098,712

Toyama Works

59,227

118,454

35,537

82,917

Total

112,023

296,146

114,517

181,629

Note: The Toyo Plant was Sumitomo Toyo Aluminium Smelting Co., Ltd. until Jan. 1981.

30

78,980Dec. 1984

98,712
98,7120Sumitomo Chemical 100 Years

Sumitomo Aluminium Smelting Co., Ltd. production in Japan and volume imported(1975 to 1986).

Production in Japan(left axis)
Total imports(left axis)(Unit: 1,000 tons)
350(right axis)
NZAS
Venezuela
AsahanBoyne(Unit: 1,000 tons)
60

300

50

250
40
200
30
150
20
100
10

50

0

0
1975

Sigura-gura Dam power generator, P.T. Indonesia Asahan Aluminium

had success in overseas aluminum smelting projects,
beginning with the Asahan Project in Indonesia.
The Asahan Project was designed to utilize therich hydroelectric resources in North Sumatra, andthe government of Indonesia took the lead in promoting the construction of an aluminum smelting factorythat could produce 225,000 tons a year. Sumitomo
Chemical decided to get involved with this project in1969 and promoted it as the lead underwriter of theJapanese side. In 1975, the Japanese government
agreed to provide loans, making it a national project
on both sides. The first-phase facilities had an annual
capacity of 75,000 tons and were completed in January
1982. In November 1984, a ceremony was held tocommemorate the completion of all of the facilities.

77

79

81

83

85

Meanwhile, the NZAS Project in New Zealand
was led by Comalco Industries Pty. Ltd. of Australia.
In February 1969, New Zealand Aluminium Smelters
Ltd. (NZAS) was established. Sumitomo Chemical
provided 25% of the investment. In April 1971, thefirst-phase plant with a 75,000-ton annual capacity
was completed. Aluminum ingots were first accepted by Sumitomo Chemical in January 1972. Sincebusiness was accepted on a cost basis, it was particularly competitive among aluminum produced in overseas projects. In July 1996, annual capacity reached
313,000 tons (of which 64,600 tons were allotted to
Sumitomo Chemical).
Another national project was the Amazon undertaking, for which the Brazilian government began seeking
participants in August 1973. Japan’s participation
was funded by the Overseas Economic Cooperation
Fund. The resources of the Amazon River Basin were
to be used to operate an alumina plant with an annual
capacity of 800,000 tons and an aluminum plant witha 320,000-ton capacity. In the end, Japanese participants withdrew from the alumina plant plan. The firstphase of the aluminum plant (annual capacity 160,000
tons) began operations in July 1985, with the second-phase plant (same capacity) starting in 1990.
Participation in other international projects included
a joint venture for aluminum smelting in the Guayana
region of Venezuela in December 1973 (annual capacity 280,000 tons, Sumitomo Chemical investment 4%)
and an aluminum smelting joint venture on Australia’sBoyne Island (annual capacity 206,800 tons, Sumitomo
Chemical investment 4.5%) with Comalco Limited in
April 1978. Operation at the former began in February
1978 and for the latter in February 1982.

New Zealand Aluminium Smelters (NZAS) plant31

11 Construction of Singapore Petrochemical Complex
The Singapore petrochemical project was Sumitomo Chemical’s first overseas project in petrochemicals.
It was of great significance for both Sumitomo Chemical and the Singapore government to establish a petrochemical base in Singapore with access to cheaper naphtha than in Japan and centered in the Southeast
Asian market with its growing demand. The expansion into Singapore provided Sumitomo Chemical withvaluable knowhow and experience in facing new challenges as Sumitomo Chemical moved toward full-scale
globalization.

Singapore Petrochemical Complex around 2008

Promotion of the Singapore National Project
The Singapore petrochemical project commenced
in December 1971 when Sumitomo Chemical received
a request for cooperation from the Singapore government. Sumitomo Chemical expected this projectto enable it to secure an inexpensive supply of naphtha and a production base for expansion into theSoutheast Asian market. The project paved the way
for further globalization.
In January 1975, Sumitomo Chemical concluded
a basic agreement with the Singapore government
to construct a petrochemical complex centered onan ethylene plant with an annual production capacityof 300,000 tons. In the meantime, a global recession
was triggered by the first oil crisis, and the future of
petrochemical businesses became uncertain. Despite
this, Sumitomo Chemical was committed to making a success of the Singapore project. Sumitomo
Chemical approached the Japanese government andJapan’s petrochemical industry, making strong efforts

to get their support and cooperation to promote theproject as a national project. Although negotiations
often entailed difficulties, Sumitomo Chemical finallysecured their agreement to support the project as anational project.
In July 1977, a Japan-based investment company
was established with the support of the Overseas
Economic Cooperation Fund (OECF) and a total oftwenty-three companies from Japan including elevenpetrochemical companies. In August of the same year,
the Petrochemical Corporation of Singapore (Pte.)
Ltd. (PCS) was launched as the local ethylene center company. In 1980, two Japan-based investmentcompanies were established with plans to produce
derivatives such as polyethylene, polypropylene, andethylene glycol. In Singapore, three companies in1980 and one company in 1982 were respectively
established to produce derivatives.
In early 1983, the PCS ethylene plant and some ofthe derivatives plants were completed, but amid glob-

First phase of Singapore petrochemical projectFirst phase

FoundedProducts at time of plant completion

Japan-Singapore Petrochemicals Company Limited (JSPC)

July 1977

Sumitomo Chemical 46.2%, Overseas Economic Cooperation
Fund 20%

Investing company
on Japan side

Nihon Singapore Polyolefin Co., Ltd (NSPC)March 1980

Sumitomo Chemical 78.57%

Investing company
on Japan side

Japan Singapore Ethylene Glycol Company (JSEC)

May 1980

Mitsubishi Petrochemical Co., Ltd. 28%,
Nippon Shokubai Kagaku Kogyo Co., Ltd. 26%,
Mitsui Petrochemical Industries, Ltd. 26%

Local company

Petrochemical Corporation of Singapore (Pte.) Ltd. (PCS)

Aug. 1977

Ethylene 300,000 tons, Propylene 160,000 tons,
Butadiene 45,000 tons, BTX 126,500 tons

JSPC 50%, Singapore government 50%

Local company

The Polyolefin Company (Singapore) Pte. Ltd.(TPC)

May 1980

Low-density polyethylene 120,000 tons,
Polypropylene 100,000 tons

NSPC 70%, Singapore government 30%

Local company

Phillips Petroleum Singapore Chemicals (Private) Limited(PPSC)

April 1980

High-density polyethylene 80,000 tons

Phillips Petroleum Company 60%, Singapore government 30%,
Sumitomo Chemical 10%

Local company

Denka Singapore Private Limited (DSPL)

Sept. 1980

Acetylene black 5,200 tons

Denki Kagaku Kogyo (DENKA) 80%,
Singapore government 20%

Local company

Ethylene Glycols (Singapore) Private Limited (EGS)

April 1982

Ethylene oxide 80,000 tons,
Ethylene glycol 87,500 tons

JSEC 50%, Singapore government 28%, Sumitomo Chemical 2%* Percentage of shareholding is as of Jan. 27, 1984, except JSEC (as of May 1980) and EGS (as of April 1982).

32

Main investors*

Investing company
on Japan side

Sumitomo Chemical 100 Years

Start-up ceremony for first phase PCS

al economic confusion due to the second oil crisis,commercial operations did not begin until February
1984. In February 1985, all facilities for the first phaseof the project were completed and the Singapore
Petrochemical Complex went into full-scale operation.
Start of the Second Phase
In 1987, the Singapore government decided tomove forward with the privatization of state-owned
enterprises in hopes of better growth for capital markets and more efficient use of funds, and indicated an
intention to sell all government-owned shares in the
Singapore petrochemical project to the Shell Group.
The wishes of the Singapore government were ultimately respected, and an agreement reached whereby it handed over its stakes in PCS and the derivatives
production companies. As a result, the Singapore
government holdings—50% of issued shares of PCS,
30% of The Polyolefin Company (Singapore) Pte.
Ltd., and 50% of Ethylene Glycols (Singapore) Private
Limited—were transferred to the Shell Group.
Along with the development of Asian economies, the petrochemical business in Singapore also
advanced and, since 1985, PCS and the derivatives
production companies have been in full operation.
As demand for petrochemical products was anticipated to continue to increase in the Asian region, in
December 1994, Sumitomo Chemical and the Shell
Group as central players embarked on the second
phase of the Singapore petrochemical project.
After two years of construction work, in April 1997, theethylene plant in the second phase (annual production
capacity of 515,000 tons) started operation. Combinedwith the first-phase capacity, total annual production

capacity reached 965,000 tons, making the Singapore
complex the largest of its kind in Southeast Asia.
In May 2000, a new condensate splitter was built
in collaboration between PCS and Shell Eastern
Petroleum Ltd. to diversify the sources of the raw
material, naphtha, and secure its stable supply. As
for the production of derivatives, in October 2006, thelinear low-density polyethylene plant was converted
to make higher value-added polypropylene and total
annual production capacity increased to 650,000
tons. In December 2013, the Sumitomo ChemicalGroup built a plant to produce solution polymerization
styrene-butadiene rubber, a raw material for high-performance, fuel-efficient tires. At the same time, PCS
is in the process of constructing a facility to increase
production of butadiene (annual production capacityof 100,000 tons) and its completion is scheduled forthe second quarter of 2014.
Methyl methacrylate (MMA) business in Singapore
In the second phase of the Singapore petrochemical project, new businesses were added, such as the
production of methyl methacrylate (MMA) and acrylic
acid. MMA monomer is used in cast sheets, cultured
marble, MBS resin, transparent ABS resin, etc., andits demand was beginning to grow rapidly in theSoutheast Asian market.
New plants were constructed in Pulau Sakra—anisland adjacent to Pulau Ayer Merbau, the island on
which PCS’s ethylene center is located—and connected by pipeline to PCS. Sumitomo Chemical Singapore
Pte Ltd was established to manage the MMA business, while production of MMA monomer and polymers, acrylic acid, etc. was undertaken by its two
wholly-owned subsidiary companies as well as four
joint-venture companies.
In the mid-2000s, the rapid increase in demand for
MMA polymers used in IT-related products, such as
liquid crystal displays and projection television, led toan expansion of the MMA market, with annual market
growth rate exceeding 7%. To meet this demand, MMA
polymer production was bolstered in August 2004.
This was followed by a second plant and a third one for
MMA monomer in August 2005 and in January 2008,
and a second plant and a third one for MMA polymers
in December 2007 and in July 2012 respectively.

Second phase of Singapore petrochemical project
Second phase

Start of operations

Products at time of plant completion

Investors

Local company

Petrochemical Corporation of Singapore (Pte.) Ltd. (PCS)

April 1997

Ethylene 515,000 tons, Propylene 258,000 tons,
Butene-1 32,000 tons, MTBE 66,000 tons, BTX 217,000 tons

JSPC 50%
Shell Group 50%

Local company

The Polyolefin Company (Singapore) Pte. Ltd. (TPC)

March 1997

Low-density polyethylene 70,000 tons,
Linear low-density polyethylene 120,000 tons,
Polypropylene 120,000 tons

NSPC 70%
Shell Group 30%

Local company

Phillips Petroleum Singapore Chemicals (Private) Limited (PPSC)

May 1997

High-density polyethylene 200,000 tons

Phillips Petroleum Company 50%,
Singapore government investment company 30%,
Sumitomo Chemical 20%

Local company

Denka Singapore Private Limited (DSPL)May 1997

Acetylene black 6,000 tons

Denki Kagaku Kogyo (DENKA) 100%

Local company

Hoechst Acetyls (Singapore) Pte. Ltd. (HASL)

July 1997

Vinyl acetate 170,000 tons

Hoechst Group 100%

Local company

Seraya Chemicals Singapore Private Limited (SCSL)

April 1997

Styrene monomer 315,000 tons, Propylene oxide 140,000 tons

Shell Group 70%, Mitsubishi Chemical 30%

33

12 Separation of Pharmaceutical Business from Sumitomo Chemical
and Inauguration of Dainippon Sumitomo Pharma Co., Ltd.

Since the 1980s, the environment surrounding the pharmaceutical business increased in severity. In a
bid to improve efficiency, and flexibility in all areas (including production, sales, and research), Sumitomo
Chemical and Inabata & Co., Ltd. separated and merged their pharmaceutical business to found Sumitomo
Pharmaceuticals Co., Ltd. in 1984. In 2005, Sumitomo Pharmaceuticals acquired Dainippon PharmaceuticalCo., Ltd. in a merger to strengthen its business foundation in Japan and to improve its global expansion.
Thus Dainippon Sumitomo Pharma Co., Ltd. was born.
Press conference to announce reaching of basic agreement among Sumitomo Pharmaceuticals,
Dainippon Pharmaceutical, and Sumitomo Chemical on the merger

Founding Sumitomo Pharmaceuticals Co., Ltd.
At the beginning of the 1980s, the Japanese government attempted to control medical costs covered by the health insurance system. The prices ofdrugs were cut 51.2% cumulatively and the insurance
scheme was reformed, making the situation increasingly difficult for the Japanese pharmaceutical industry.
With this situation as background, Sumitomo
Pharmaceuticals Co., Ltd. (SP) was established on
February 6, 1984. The objective was to improve competitiveness in the pharmaceutical business throughenhanced efficiency in research and development
and improved flexibility in marketing. In October 1984,
Sumitomo Pharmaceuticals commenced businesswith a capital of 5 billion yen. Sumitomo Chemical
owned 60% and Inabata owned 40%. Sumitomo
Chemical continued to produce active pharmaceuticalingredients and intermediates for SP.
The first major product was interferon. Sumitomo
Chemical was licensed the manufacturing technology
of interferon from The Wellcome Foundation Ltd. of
the United Kingdom in August 1980. In September
1985, SP completed the Ehime Bio Plant, a factory forinterferon production. In January 1987, SP obtained
approval to make interferon for kidney cancer andmultiple myeloma and, in April of that year, sales
began under the product name Sumiferon. In 1992,
demand for the drug increased when it was approved34

for use for Hepatitis C. Sales for 1992 and 1993
reached 40 billion yen in each year. Sumiferon thus
became a driving force for growth of SP.
Pfizer Corporation of the United States and SP
signed a cross-licensing contract in March 1987. SPgranted Pfizer a license to use the substance patentof Sediel, an anxiolytic. In December 1993, SP developed Amlodin, a drug for hypertension and angina
pectoris, using Pfizer’s substance patent. Amlodin
became a major product of SP, with sales exceeding
40 billion yen in 2003.
Another major product was Meropen, a carbapenem antibiotic, launched in September 1995.

Ehime Bio Plant

Sumitomo Chemical 100 Years

Plant for Meropen active ingredients (Oita)

Meropen was recognized for its excellent efficacy andit became the top selling carbapenem antibiotic in
Japan in December 2004.
Concerning the production system, SP added
new facilities for producing active ingredients anda new building for Meropen formulation in Oita inorder to comply with internationally recognized good
manufacturing practices (GMP), to contribute to sales
expansion and to new product launchings throughenhanced production facilities. These facilities werecompleted in September 2003. The existing facilities
for active pharmaceutical ingredient production wereconverted to an exclusive plant for Meropen active
ingredients. The new plant was built as a multipurpose
facility for many different drugs, such as Amlodin. At
that point, the active ingredient production division
was transferred to SP, which then became responsible for the entire production process, from active substances to formulation.
Birth of Dainippon Sumitomo Pharma Co.,Ltd.
The business environment in which the Japanesepharmaceutical industry operates has become
increasingly challenging due to various factors, suchas the government’s continuing initiatives to restrain
medication expenditure through periodic drug pricecutting and other measures, the soaring R&D investment for drug development, and the intensifying competition with US and European mega pharmaceutical companies. Within this environment, in October
2005, Sumitomo Pharmaceuticals acquired Dainippon
Pharmaceutical Co., Ltd. in a merger to strengthen
its business foundation in Japan and to improve its
global expansion, thus forming Dainippon Sumitomo
Pharma Co., Ltd. Dainippon Pharmaceutical has its
roots in Osaka Pharmaceuticals, which was establishedin May 1897. Osaka Pharmaceuticals subsequently
in 1898 merged with Dainippon Pharmaceutical, thefirst pharmaceutical company in Japan, and took its
name. The new Dainippon Sumitomo Pharma Co.,
Ltd. (DSP) became one of the top ten pharmaceuticalcompanies in Japan. It employed 1,500 medical representatives, putting it on a par with the largest phar-maceutical companies in Japan. It had capital of 22.4
billion yen, with Sumitomo Chemical owning 50.1%(Subsequently in June 2014, DSP changed its name to
Sumitomo Dainippon Pharma Co., Ltd.)DSP put its emphasis on four main products:
Amlodin, Gasmotin (a gastrokinetic agent), Prorenal(a vasodilator), and Meropen. It also began global
development of drugs, centered around a drug forschizophrenia, named Latuda, of which Sumitomo
Pharmaceuticals had begun pre-clinical trials in 1993.
In order to prepare for sales of the product in the
United States, DSP acquired Sepracor Inc. for US$ 2.6
billion in October 2009. In April 2010, Sepracor mergedwith Dainippon Sumitomo Pharma America, Inc., andthe new company changed its name to Sunovion
Pharmaceuticals Inc. in October of the same year. In
December 2009, a new-drug application was madeto the US Food and Drug Administration (FDA) toobtain approval of Latuda. The approval was grantedin October 2010 and sales began in February 2011.
The next step was marketing Latuda in Europe.
In March 2011, DSP made contracts for development
and selling of Latuda in 26 EU countries (excluding theUnited Kingdom) and Russia and three other non-EU
countries with Takeda Pharmaceutical Co., Ltd. The
two companies developed it together, sharing thecosts. Takeda Pharmaceutical got exclusive rights tosell the product, with the condition that it paid royalties to DSP based on the sales amount. Latuda wasalso approved by Health Canada in June 2012, andDSP began sales in that country in September of thesame year.

Latuda35

13 Expansion of Agricultural Chemicals BusinessWith its high-level research and development capability,
Sumitomo Chemical has launched many new agrochemicals
and household insecticides. In addition, Sumitomo Chemical
has undertaken strategic mergers and acquisitions both inJapan and internationally. As a result, Sumitomo Chemical
successfully established an organization that makes it truly
worthy of the description “global player.”

Head office of Valent U.S.A. Corp.

Product Line-up of Agricultural Chemicals Sector
Sumitomo Chemical’s Agricultural Chemicals
Sector has insecticides, herbicides, and fungicides in
its line-up of agrochemicals, insecticides and insect
repellants for household use, as well as feed additives
such as methionine for raising livestock, especiallypoultry. Through these products, Sumitomo Chemical
contributes to not only stable crop yields, increasedfood production, but also clean and healthy lifestyles.
In the agrochemical business, Sumitomo Chemicallaunched a big hit herbicide. It was flumioxazin, an
herbicide that was registered for use on soybeans inArgentina in September 1993. After the registration in

Flumioxazin plant (Oita)

36

the United States, the world’s largest market, in April
2001, demand rose dramatically from 2004 when it
proved highly effective on weeds in soybean fields
that had been difficult to control. Flumioxazin products are sold under the trade names of Sumisoya,
Valor, and others. Under the alliance with MonsantoCo., Inc. entered in October 2010, flumioxazin products were applied to Monsanto’s weed management
program, which led to a great sales increase of flumioxazin.
In the field of household insecticides, powerful products have been launched in Sumitomo
Chemical’s area of specialty, pyrethroids. In April
2002, Eminence was launched and proved extremely
high mosquito knockdown efficacy compared withexisting products. It is volatile at room temperature,and this characteristic realizes products with newconcepts, such as non-heated fan devices for mosquito repellant and energy-free resin emanator.
Demand for methionine, a feed additive, grewas poultry consumption expanded in Europe, North
America, China and Southeast Asia in the 1990s.
To meet this demand, the Ehime Works increased
annual production capacity to 19,000 tons in 1995.
Subsequently a second plant was constructed in 1998
and a third in 2005. A fourth plant was completed
in 2010, for a total production capacity of 140,000
tons a year. In addition, in 2012, a 20,000-ton-a-year
plant was built in Dalian, China, making Sumitomo
Chemical a global supplier with capacity of 160,000
tons a year.

Sumitomo Chemical 100 Years

Agro Co., Ltd. (capital 9.38 billion yen, 60% owned by
Sumitomo Chemical) was established to take over theTakeda Pharmaceutical agrochemical business, and in
November 2007, it merged with Sumitomo Chemical.
As a TSP, Sumitomo Chemical provides not only
products, such as agricultural chemicals, fertilizer,
farming materials and seeds but also information andservices. TSP supports all aspects of agriculture, fromsoil preparation and cultivation to transportation andsales of crops. As a part of TSP activities, SUMIKA
FARM Nagano was established in May 2009, andsubsequently, six other agricultural corporations were
established in various areas in Japan. The corporations are experimenting in and verifying new agricultural technology, as well as growing selected crops
such as strawberries, tomatoes and others.

New methionine plant (Ehime)

Strengthening the Foundation of Agrochemical
Business in Japan
In its agrochemical business in Japan, Sumitomo
Chemical positions itself as a total solution provider (TSP) and is making strong efforts to expand thesales into the non-crop use field. Sumitomo Chemical
is also strengthening its business with mergers andacquisitions. Along with increasing the presence of
Sumitomo Chemical in Japan through the sales channels acquired from Takeda Pharmaceutical, Sumitomo
Chemical also expanded sales of acquired products
by moving them into its global sales network. The integration of businesses therefore had enormous synergistic effects. The integration was handled in two stages. In November 2002, Sumitomo Chemical Takeda

SUMIKA FARM Nagano

Founding of agricultural corporations (2009 to 2013)(Unit: Millions of yen)Company name

FoundedCapitalSumitomo Chemical
ownership (%)

Main crops

SUMIKA FARM Nagano

May 2009

113.5

100%*

SUMIKA FARM Oita

Dec. 2009

300.0

100%*

Tomatoes

Sunrise farm Saijo

Aug. 2011

100.0

94%

Lettuce, cabbage

SUMIKA FARM Yamagata

Sept. 2011

63.0

79%

Tomatoes

SUMIKA FARM Mie

Nov. 2011

120.0

100%

Mitsuba

Sunrise farm Toyota

Feb. 2013

250.0

100%

Tomatoes

SUMIKA FARM Ibaraki

July 2013

40.0

90%

Cabbage

Strawberries

Progress in Globalization
Since the launch of Sumithion, export sales had
accounted for a large portion of Sumitomo Chemical’s
Agricultural Chemicals Sector, meaning overseas
business has taken an important role for the sector. Moreover from the late 1980s, globalization has
increased at a rapid pace, and Sumitomo Chemical
now has production facilities and sales locations inmany countries of the world.
In April 1988, Sumitomo Chemical established
Valent U.S.A. Corp. as a joint venture (wholly owned
by Sumitomo Chemical since 1991) with Chevron
Chemical Company and was able to make a full-scale
entry into the US market, the largest agrochemical market in the world. In January 2000, Sumitomo
Chemical acquired a department for biological pesticides of Abbott Laboratories and established Valent
BioSciences Corp.
Also in the major European countries, subsidiaries
were established: Sumitomo Chemical France established in October 1990 (renamed Sumitomo Chemical
Agro Europe S.A.S. in July 1994) and Philagro France
S.A.S. established in June 1993. In Asia, manufacturing bases were founded, including SC Enviro Agro
India Private Limited (SCEAI) established in April 2000
(merged with Sumitomo Chemical India Private Limited
in September 2011) and Dalian Sumika Chemphy
Chemical Co., Ltd. established in April 2003.
Sumitomo Chemical’s business has been globalized by mergers & acquisitions and business tie-ups.
In May 2001, Sumitomo Chemical acquired the household insecticide business of Aventis Crop Science.
In April 2010, Sumitomo Chemical acquired capital inAustralia’s Nufarm Limited and formed comprehensive tie-ups in the agrochemicals field.
In April 2011, the Agricultural Chemicals Sector
made a fresh start with its new name of “Health andCrop Sciences Sector,” expanding to the pharmaceutical chemicals (active pharmaceutical ingredients andintermediates) business.

Note: Capital is as of September 2013. * Includes affiliate ownership.

37

14 IT-related Chemicals Sector Established andBusiness Grows

Sumitomo Chemical positioned the IT-related chemicals businessas “one of the pillars supporting the company’s future” and establishedthe IT-related Chemicals Sector in October 2001. South Korea, China,
and Taiwan were identified as markets with the greatest potential, andproduction companies were established in those areas to actively expand
business. With the dramatic widespread use of LCD panels, Sumitomo
Chemical recorded strong growth in sales of LCD display materials, suchas polarizing films and color filters.

Polarizing films

Establishing the IT-related Chemicals Sector
In the latter half of the 1990s, the use of theInternet, personal computers and mobile phones
expanded from business applications to personal applications. With such rapid development of IT,
Sumitomo Chemical added IT-related chemicals business to its medium-term business plans (FY 2001 to2003), positioning it as the third pillar (following polyolefin and life sciences) that would support Sumitomo
Chemical into the future. To strengthen and nurture the
IT-related chemicals business, the optical product andthe electronic material businesses, and a part of thefunctional material business, which had been includedin the Basic Chemicals and Fine Chemicals Sectors,

Net sales of IT-related Chemicals Sector (FY 2001 to FY 2013)(Unit: Billions of yen)
400

Net sales of IT-related Chemicals Sector (left axis)
Proportion of IT-related Chemicals Sector (right axis)

(%)
22
20

350

18
300
16
250

14
12

200

10
150

8

100

6
4

50

2
0

0
2001 02 03

04

05 06

07

08

09

Note: Proportion is to total Sumitomo Chemical sales.

3810

11 12 13
(Fiscal year)

were consolidated into a single unit when the IT-related
Chemicals Sector was established on October 1,
2001. In the ICT (Information and Communication
Technology) market, to expand business by quickly
responding to the needs of customers, marketing
as well as research and development needed to be
pursued in a comprehensive—total solution—manner
under one business unit.
The new sector consisted of four divisions: Optical
Materials, including polarizing and retardation films;
Semiconductor Process Materials, which included
photoresist for manufacturing semiconductors andhigh-purity electronic chemicals; Electronic Materials
for epoxy resin molding compounds for encapsulationof semiconductor devices, and high-performancepolymers; and Chemical Compound Semiconductor
Materials, which handled MOEPI wafers, organic metals, and other products. Because research and product development are essential in IT, an IT-related
Chemicals Research Laboratory was establishedat the same time the sector was launched, integrating research, production and sales. Production ofcolor filters was handled by a joint venture between
Sumitomo Chemical and two companies in Taiwan,
New STI Technology, Inc. (established in May 2005 in
Ehime, 40% owned by Sumitomo Chemical; mergedwith Sumitomo Chemical in April 2006)
At first, the operating rate for products in the
IT-related Chemicals Sector was only 50-60% of
capacity. But through building factories near theSumitomo Chemical 100 Years

factories of customers in South Korea, China, andTaiwan, and creating a product supply system,
Sumitomo Chemical benefited from the sizable production increases by those customers of flat-screen
TVs and LCD panels. As a result, between FY 2002
and 2005, net sales for the sector increased each year
by 30 to 50%. In FY 2013, net sales were 362.3 billion
yen, accounting for 16% of sales of the Sumitomo
Chemical Group.
Overseas Expansion of LCD Materials Business
The IT-related chemicals field has the following
characteristics: (1) the product life cycle is short, (2)a large initial investment is required, and (3) multiple
and differing technologies are required to properly
meet customer needs. To be successful in Sumitomo
Chemical’s focused business of LCD panels, therequests of customers must be accurately interpreted
to ensure both superior performance and cost benefit
as an assembled component, providing customers
with the best possible solutions.
To deal with these characteristics, the sector put
its top priority on accelerating research to develop
high-quality products that meet market requirements.
At the same time, Sumitomo Chemical pursued production and business activities closely attuned to customer needs, and actively expanded business in South
Korea, Taiwan, and China, and other areas.
LCD panels used in flat-screen TVs, personal computers, mobile phones, etc. are composed of manylayers of materials. Of those, Sumitomo Chemical
supplies polarizing films for LCD, color filters, light-diffusion panels, light-guide panels, and others. The

LCD structure

Glass substrate(Low soda alumina)
Color ﬁlter layer(Color ﬁlter, Color resist)

Liquid crystal layer

ITO electrode
TFT layer(Photoresist, Target,
Etchant, Stripper,
High-purity chemicals, etc.)
Glass substrate(Low soda alumina)
Light-diffusion panel
Light-guide panel

Lamp/LED

Note: Sumitomo Chemical
products are indicatedby product names written in red

beginning of overseas production was in May 2001,
when Dongwoo Fine-Chem Co., Ltd. (established to
produce high purity electronic chemicals for semiconductor chip manufacturing) began manufacturing chip-cutting polarizing films. In April 2003, theproduction of color filters began, and in Septemberof that year, the company began the production ofpolarizing film rolls. As a result, Dongwoo Fine-Chem
Co., Ltd. has become a core company in the IT-related
Chemicals Sector, with the largest production capacity
for LCD materials.
In June 2001, Sumitomo Chemical and Inabata& Co., Ltd. invested together to establish Sumika
Technology Co., Ltd. in Taiwan. In April 2004, a comprehensive production system for polarizing films
was built. The first production location in China was
Shanghai KSC Optical Device Co., Ltd., foundedin September 2001 (renamed Sumika Electronic
Materials (Shanghai) Co., Ltd. in March 2004), followed by Sumika Electronic Materials (Wuxi) Co., Ltd.
in July 2004 and Sumika Huabei Electronic Materials(Beijing) Co., Ltd. in November 2009. For production in
Europe, Sumika Electronic Materials Poland Sp. Zo.o.
was established in August 2006 (with production ending at the end of 2012).

Dongwoo Fine-Chem plant (South Korea)

Sumika Technology plant (Taiwan)

39

15 Progress of the Rabigh Project
The Rabigh Project in Saudi Arabia is a world-scale integrated oil refining and petrochemical complex. This project
has great significance for Sumitomo Chemical, toward theinitiative of “Promoting Globally Integrated Management.” In
the second quarter of 2009, the Phase I facilities with annual
capacities of 1.3 million tons of ethylene and 900,000 tons ofpropylene began operation. In May 2012, Sumitomo Chemical
confirmed the feasibility of the Rabigh II Project and decided
to proceed by finalizing various project elements.

Rabigh Refining and Petrochemical Company complex

Integrated refinery and petrochemical complex:

undertaking would contribute to a closer relationship

The Rabigh Project

between Japan and Saudi Arabia.

The Rabigh Project dates back to 2002 when

In August 2005, Sumitomo Chemical and Saudi

an investment bank invited Sumitomo Chemical to

Aramco signed a joint-venture agreement and Rabighplace bids. The project was to be run jointly with

Refining and Petrochemical Company (Petro Rabigh)the Saudi Arabian Oil Company (Saudi Aramco), thewas established in September as a fifty-fifty joint ven-state-owned oil company. A world-scale integrated

ture. In March 2006, a groundbreaking ceremony was

oil refining and petrochemical complex was to beheld, to which the Saudi Arabian Minister of Petroleum

built in Rabigh in Saudi Arabia. Sumitomo Chemicaland Mineral Resources, other government officials

was selected as the partner company from amongfrom both countries and guests from companies relat-

the leading chemical companies in the world. In May

ed to the project were invited.

2004, a memorandum between Sumitomo Chemical
and Saudi Aramco was signed.

Completing the Phase I Project

It is one of the largest integrated refining and pet-In carrying out the Rabigh Project, there were geo-rochemical complexes in the world and it takes fullpolitical risks involved. For the purpose of mitigating

advantage of a stable supply of cost-competitivethose risks, Sumitomo Chemical conducted thoroughfeedstocks provided by Saudi Aramco as well as its

research in advance, making use of project financing

economies of scale. Although Sumitomo Chemical
had been operating a large-scale complex in a petroleum-refining center, Singapore, this project was
Sumitomo Chemical’s first attempt to establish afoothold in an oil and gas-producing country. The
project, therefore, opened a new stage in Sumitomo
Chemical’s global business strategy. At the sametime, it was expected that the Rabigh Project would
promote the development of downstream industries,
and contribute to sustainable economic developmentin the Kingdom of Saudi Arabia through the creationof employment opportunities and diversification of its
manufacturing industries. It was also hoped that the40

Signing the FS Memorandum, Rabigh Phase I ProjectSumitomo Chemical 100 Yearsand investment insurance. Of the total cost of US$9.8
billion, about 60% was covered by project financing.
In March 2006, Sumitomo Chemical signed financing contracts with a consortium of banks, including
the Japan Bank for International Cooperation (JBIC),
Saudi Arabian financial institutions and commercial
banks of other countries.
In October 2008, Petro Rabigh took over from
Saudi Aramco petroleum refining facilities with a daily
capacity of 400,000 barrels. In April and May of 2009,
new ethane cracker facilities and fluid catalytic cracking devices, respectively, went into operation. The
petroleum refining and integrated petrochemical complex facilities were built on 2,000 hectares (nine times
the size of the Chiba Works). At the peak of construction, 40,000 people were working there. The annual

Rabigh Refining and Petrochemical Company complex

production capacities of the main facilities were 2.9
million tons of naphtha, 1.3 million tons of ethylene
and 900,000 tons of propylene.

expansion of the existing petroleum refining and pet-

In January 2008, Petro Rabigh held its initial publicrochemical complex of Petro Rabigh. In May 2012,

offering (IPO) on the Saudi Arabian stock exchange.

Sumitomo Chemical confirmed the feasibility of theFollowing the IPO, paid-in-full capital became SAR

Rabigh II Project and decided to proceed by finaliz-

8.76 billion (approximately 270 billion yen), whereing various project elements, such as agreements for

Sumitomo Chemical and Saudi Aramco each had aengineering, procurement, and construction and other

37.5% stake in Petro Rabigh.

project contracts.

Starting Work on the Phase II Project

cracker and building a new aromatics complex, will

The Rabigh II Project, by expanding the ethane
In April 2009, Sumitomo Chemical and Saudi

use 30 million standard cubic feet per day of eth-

Aramco signed the Memorandum of Understanding,ane and approximately 3 million tons per year ofwhich led to a fea-

naphtha as feedstock to produce a variety of highCapacity of derivative products from Rabigh Phase I Project (2009)sibility study for thedevelopment ofvalue-added petrochemical products. Each plant
Names of products

Production capacity

Linear low-density polyethylene

600,000 tons

the Rabigh Phase

High-density polyethylene

300,000 tons

II Project (Rabigh II

Monoethylene glycol

600,000 tons

Polypropylene

700,000 tons

Project) as a major

Propylene oxide

200,000 tons

will be brought on stream, beginning in the first halfof 2016. The total investment is currently projected
to reach approximately US$7 billion. The Rabigh II
Project’s main products will be EPDM (ethylene propylene diene methylene linkage), thermoplastic polyolefin (TPO), methyl methacrylate (MMA) monomer,
MMA polymer (PMMA), low density polyethylene/ethylene vinyl acetate (LDPE/EVA), para-xylene/benzene,
cumene and phenol/acetone.

Rabigh Phase II Project derivative product plans (2012)
Product nameCompletion ceremony for the Rabigh Project

Production capacity

EPDM

Approx. 70,000 tons

TPO

Approx. 10,000 tons

MMA monomer

Approx. 90,000 tons

PMMA

Approx. 50,000 tons

LDPE/EVA

Approx. 80,000 tons / Approx. 70,000 tons

Para-xylene / Benzene

Approx. 1.3 mil. tons / Approx. 400,000 tons

CumeneApprox. 400,000 tons

Phenol / Acetone

Approx. 250,000 tons / Approx. 150,000 tons

41

16 Aiming to be a Truly Global Chemical Company
Sumitomo Chemical carried out measures to promote
globally integrated management, such as establishing abusiness philosophy, introducing a new HR system andestablishing corporate branches with the aim of becoming
a truly global chemical company. The Sumitomo ChemicalGroup as a whole has also been practicing “Sustainable
Chemistry” built on its CSR-based management.

Volunteers planting mangrove trees in Thailand

Dealing with Global Operations
As part of its Three-Year Corporate Business
Plan covering the fiscal years from 2004 to 2006,
Sumitomo Chemical set forth its vision for the 21st
century: becoming a truly global chemical company
as a major player in every area of business operations.
The gist of Sumitomo Chemical's vision of thecompany for the 21st century is as follows:
1. A company with competitive strength in global
Sumitomo Chemical Group sales and proportion of overseas sales (FY 1996 to FY 2013)(Unit: Billions of yen)

(%)

2,500

60

Net sales (left axis)
Proportion of overseas sales (right axis)

50

2,000

40
1,500
30
1,000
20
500

10

0

0
1996

42

98

2000

02

04

06

08

10

12 13
(Fiscal year)

markets
2. A company that continues to grow on the strengthof accumulated technologies, with a focus on highadded value and profitability
3. A company that operates in accordance with
global standards, places importance on shareholder value, and is sensitive to aspirations of its
employees for fulfillment of their lives
Aiming to achieve these goals, Sumitomo Chemical
reinforced its overseas operational bases and accelerated its business expansion to extend its global
reach while strengthening and enhancing corporate
governance and management systems to support thefurther development of its businesses on the global
stage. One aspect was revising the HR system. For
managers, in April 2001, new job-based grading andperformance evaluation systems were introduced. For
non-managerial employees, in July 2007, ability-based
grading was abolished and a new role-based grading
system was adopted. Global HR initiatives, such as
establishing global positions, identifying group coretalent, integrating HR systems to include recruitment,
talent development and performance evaluation, weretaken to create a mechanism to put the right person in
the right job on a global scale.
Sumitomo Chemical established Corporate

Sumitomo Chemical 100 Years

Group companies by assisting in regional businessplanning and by providing professional specialized
corporate services and support.

Group representatives from abroad meet at the Global Managers Meeting

Sumitomo Chemical Group employees in Japan and overseas (2008 to 2014)(Unit: 1,000 employees)
Japan (left axis)
25
Overseas (left axis)(%)
45

Overseas proportion(right axis)

40
20

35
30

15

25
20

10
15
10

5

5

Setting a Business Philosophy
From 2005 onward, the Sumitomo ChemicalGroup sales saw rapid increases, but globalization
was growing at an even faster pace. By FY 2010, theSumitomo Chemical Group sales overseas surpassed
50% of total sales, and by the end of March 2014,
overseas employees exceeded 40% of the Sumitomo
Chemical work force (consolidated).
This rapid globalization gave the group as a whole
diversity in terms of both culture and value orientations. In January 2009, Sumitomo Chemical took
a fresh look at its fundamental business principles,
mission and values, and committed them to writing
as a business philosophy for all the employees of theSumitomo Chemical Group companies to share andidentify with.
Sumitomo Chemical’s Business Philosophy
1. We commit ourselves to creating new value bybuilding on innovation.
2. We work to contribute to society through ourbusiness activities.
3. We develop a vibrant corporate culture andcontinue to be a company that society can trust.

0

0
2008

09

10

11

12

13

14

Note: 2008 figures are as of end of September; other figures are as of end of March.

Branches (CB) as the foundation for global expansion
at its four business bases around the world. With aview to strengthening and streamlining the headquarters functions to support its global business operations, Sumitomo Chemical established its first CB in
Singapore in 2007, followed by New York, Brussels
and Shanghai. Each CB provided Group companies
with specialized corporate expertise and services inareas such as HR, internal control, auditing, legal &ethics compliance, IT, accounting, purchasing, andlogistics.
In pursuit of business development and more efficient business management, the CBs in Shanghai
and Singapore were raised to Regional Headquarters(RHQ) as Sumitomo Chemical (China) Co., Ltd. for
China in June 2011 (office moved to Beijing in August2011) and Sumitomo Chemical (Asia Pacific) Pte Ltd in
March 2013 to cover Southeast Asia, South Asia andOceania. Subsequently in January 2014, Sumitomo
Chemical raised the remaining two CBs to RHQ as
Sumitomo Chemical Europe S.A./N.V. to cover Europe
and Turkey and Sumitomo Chemical America, Inc.
for North America, which marks the beginning of
Sumitomo Chemical's worldwide RHQ coverage. Eachcompany will act as Sumitomo Chemical’s regional
representative, supporting the Sumitomo Chemical

Corporate Statement
Sumitomo Chemical started business in 1913 as a
producer of fertilizers from sulfur dioxide gas emitted
by copper smelters. This business, which solved theenvironmental problem of air pollution while meetingthe social demand for more agricultural production,
embodied the business philosophy of the Sumitomofamily handed down from the 17th century.
“Our business must benefit society, not just our interests.” Throughout our history of almost a century, we
at Sumitomo Chemical have lived by this credo. We
have worked to build better lives by developing various businesses that meet people’s evolving needs. At
the same time, we have continuously delivered technological innovation while paying special attention to
product quality, safety and the environment.
Looking to the future, we will create new value beyond
the boundaries of chemistry by combining a variety ofideas, views and technologies. We will also continue
to take up the challenges facing the globe, from meeting basic needs, to protecting the environment, toaddressing the issues of adequate supplies of food,energy, and other resources.
In this endeavor, each of us at Sumitomo Chemical
will work together to enhance our capabilities, explore
new possibilities every day, and overcome the challenges lying ahead with enthusiasm and a strong
sense of mission.
Sumitomo Chemical will seek to continue to build trustand bring joy to people across the world through constant innovation.

43

In March 2008, the Corporate Statement was formulated to summarize common values, pride, andcommitment to share as employees of the Sumitomo
Chemical Group companies. In July 2003, theSumitomo Chemical Charter for Business Conduct
was put in place to provide the basis for the company’s compliance system and show the important
guidelines to be followed by individual employees in
conducting their daily business activities.

facturing processes that limit environmental impact
as much as possible throughout the life cycle ofproducts, and Clean Products, which are products
designed with improved performance in terms ofenvironmental friendliness, safety, and quality. From
those, new methods for producing caprolactam andpropylene oxide have been evaluated especiallywell as gentle on the environment, winning Green &Sustainable Chemistry Awards.

A Mission for Sustainable Chemistry—CSR Management
Ever since its inception, with its mission of solving
environmental problems and increasing agricultural
productivity, Sumitomo Chemical has upheld the conviction that the essence of corporate social responsibility (CSR) is to contribute to the sustainable development of society through business activities.
With this philosophy in mind, in November 2004,
the Basic CSR Policy was established. With the concept of sustainable chemistry, Sumitomo Chemical isactively pursuing CSR activities, achieving balance inthe three areas of “economy,” “responsible care,” and“society.”
The measures that best represent sustainablechemistry are Green Processes, which are manu-

Responsible Care
The concept of “responsible care” first came asa proposal from an association of chemical product manufacturers in Canada in 1985. It referred toactivities for ensuring safety, health, quality, and environmental issues throughout a product’s life cycle.
The idea was well received and increasingly popularized around the world. The International Councilof Chemical Associations adopted it in 1990, and in
1995, the Japan Chemical Industry Association established the Japan Responsible Care Council, in which
Sumitomo Chemical participated, in the same year.
Sumitomo Chemical began such activities ahead ofthis, in 1991, and in April 1994, established the Basic
Policy on Product Quality, the Environment and Safety.
This policy set down the top priorities for safety, theenvironment, and product quality at all stages of business activities. (In November 2005, the policy wasrevised to “Corporate Policy on Safety, the Environment
and Product Quality.”)In the more than twenty years that have followed,
the Sumitomo Chemical Group has undertaken a wide
range of activities, such as ensuring safe and stable
operations, improving environmental performancesand strengthening effective management of chemicals
including the communication of chemical risks throughout the supply chain, together with open and transparent communication with stakeholders. Responsible
Care is the foundation for Sumitomo Chemical CSR
activities and one of the Sumitomo Chemical Group’s
top priorities.

Receiving the Green & Sustainable Chemistry Award
Award (Year)

Winning theme

3rd GSC Award (2003)

The development and industrialization of the vapor phase Beckmann
rearrangement process for the production of -caprolactam

4th GSC Award (2004)

The development and industrialization of the hydrogen chloride oxidation
process

8th GSC Award (2008)

The development of new propylene oxide process by cumene recycling

Basic CSR Policy
By continuously creating and providing useful newtechnologies and products that have never before
existed, Sumitomo Chemical will build corporate
value while contributing to both the solution of problems facing our environment and society, and theenrichment of people’s lives.
In order to accomplish this, the Company will work toachieve a balance of profitable business operations,the preservation of the environment, safety, health,product quality and social activity. We will also pursue and promote our CSR activities with consideration for the interests of all our stakeholders, including our stockholders, employees, business partners,
and the local residents of all regions in which we
conduct business. Through our endeavors in theseareas, we hope to play a significant role in building asustainable society, while continuing to grow in orderto realize our goal of becoming a truly global chemical company in the 21st century.

44

Promoting Activities to Benefit Society
Social contribution activities are based on three
categories of contributions: (1) community contribution, (2) future contribution, and (3) global contribution;and these activities are aimed at securing safety andhealth, protecting the environment, raising children
who will lead the next generation, and assisting in natural disaster relief.
Concerning social contribution, Sumitomo
Chemical has supported African countries throughthe distribution of Olyset Net, a mosquito net to prevent malaria, and this activity is globally highly reputed. The net is made from insecticide-incorporated polyethylene fibers, which is a good example of“Creative Hybrid Chemistry.” In October 2001, Olyset
Net received the world’s first recommendation from

Sumitomo Chemical 100 Years

Olyset Net manufacturing plant in Tanzania

the World Health Organization (WHO) as a “long-lasting insecticidal net” and it gained widespread use
through WHO’s “Roll Back Malaria” campaign. In
response to WHO’s request for expanded production,
Sumitomo Chemical improved its production systemand provided the manufacturing technology free ofcharge to A to Z Textile Mills Limited, a Tanzanian
manufacturer, which began to produce Olyset Net in
September 2003. Vector Health International Limited(VHI), a joint venture between A to Z Textile Millsand Sumitomo Chemical, opened a new factory in
February 2007, employing approximately 7,000 people. This project has contributed to not only the prevention of malaria but also local economic development. In 2010, Sumitomo Chemical increased thetotal production capacity in Tanzania, China, andVietnam to 60 million nets a year, which has greatly
contributed to reducing the number of people suffering from malaria all over the world. Believing thatdevelopment of a proper primary education system
and related infrastructure is essential to the growth ofAfrican countries, Sumitomo Chemical has been using
a part of the proceeds from the Olyset Net businessfor construction of elementary and junior high schoolbuildings, lunch facilities, and dormitories for teachersin African countries.
The Sumitomo Chemical Group has been sup-porting the areas affected by the Great East Japan
Earthquake in a variety of ways since immediately
after the earthquake on March 11, 2011. Specifically,in the summer of 2011, Sumitomo Chemical donatedinsecticides to deal with flies and other pest infestations. Since 2011, employee volunteers have visited the disaster-stricken areas to clean up debris,
install highly functional insecticidal nets, and donate
functional innerwear made from Sumitomo Chemical
products to people living in temporary housing.
Sumitomo Chemical has sponsored science experiment classes, mainly for local elementary school
students as a part of extracurricular activities during
the summer vacation period. Moreover, in Sumitomo
Chemical’s Head Office (Tokyo) cafeteria, special
menu items have been offered made with foods produced in the disaster-stricken areas, and a portion ofsales from these meals has been donated to a scholarship fund to support children who lost their parents
in the March 11 tsunami. Sumitomo Chemical has also
been holding fairs to sell produce and processed foodfrom earthquake-affected areas.
In addition to the above, Sumitomo Chemicalhas been conducting a mangrove planting project inThailand.

Volunteer activities in areas affected by the Great East Japan Earthquake(installing functional insecticidal nets)

Sumitomo Chemical has been holding fairs to sell produce and processed food from quake-affected areas.

45

17 For a Better Tomorrow
In order to accomplish sustained growth over the
next 100 years, Sumitomo Chemical is to its full extent
promoting the policy measures of the new Three-Year
Corporate Business Plan for FY 2013-2015. The plan isdevoted to a period of strengthening the foundations of
Sumitomo Chemical’s business. Under the Corporate
Slogan of “Creative Hybrid Chemistry For a Better
Tomorrow,” Sumitomo Chemical is contributing to asustainable society as well as aiming to take a significant leap forward.
The world has many global-scale issues to deal
with, but Sumitomo Chemical hopes to provide newtechnologies and products that will help to solve theseissues and realize abundant lifestyles for people onearth. In this way, Sumitomo Chemical is doing its best
to achieve sustainable growth together with society as
a diversified global chemical company.
Polymer organic light emitting diode (PLED) prototype testing (Tsukuba Material Development
Laboratory)

Change and Innovation—for the next hundredthanniversary
In the FY 2013-2015 medium-term corporate
business plan, under the new slogan of “Change
and Innovation—for the next hundredth anniversary”
Sumitomo Chemical will promote change and innovation in the three areas of business structure, businessdevelopment, and corporate culture, and work on fivepriority management issues to achieve its performancetargets: (1) enhancing financial strength, (2) restructuring businesses, (3) developing next-generation businesses, (4) promoting globally integrated management,and (5) ensuring strict legal and ethical compliance aswell as maintaining safe and stable operations.
With regard to (1), Sumitomo Chemical is striving to take measures to reduce its interest-bearing
liabilities through three major initiatives: improving
profitability, rigorously selecting investments, andimproving asset efficiency to secure greater strategic
freedom to aggressively pursue growth opportunities.
The second priority management issue calls for
Sumitomo Chemical to exit or downsize underperforming businesses, improve its business portfolio
and boost profitability. One example in the field of petrochemicals is optimizing of production systems.
Japan (Chiba): Develop new technologies, products and know-how and roll them out globally, playing
the roles of “mother plant” and “mother laboratory.”
Singapore: Deliver high value-added products,
meeting the needs of key customers in Asian markets.
Saudi Arabia: Produce cost competitive products,
taking advantage of low-cost feedstock and fuels.

46

To strengthen the competitiveness of the Chiba
Works, the production base in Japan of its petrochemical business, Sumitomo Chemical has decided
to close down an aging ethylene plant (annual production capacity: 415,000 tons) in or before September
2015 when the next periodic shutdown maintenancewill take place, and thereafter procure ethylene andother basic petrochemical feedstock from Keiyo
Ethylene (affiliate), which operates the newest and thelargest production facilities in Japan.
With respect to (3), six core technologies will be
used and combined to introduce new businesses tocontribute to a sustainable society: catalyst design,
high-precision processing, design of functional organic chemicals and polymers, analysis of bio-mechanisms, device design, and design of functional inorganic materials.
Sumitomo Chemical has identified environment
and energy, life sciences, and ICT (Information andCommunication Technology) as three areas with highgrowth potential and has been making strong efforts
to develop next-generation businesses in these areas.
Regarding (4), Sumitomo Chemical will globally
optimize the functions in each business—from R & D
to manufacturing, marketing, sales and logistics—interms of market, technology, cost and business environment.
Concerning (5), Sumitomo Chemical will further
strengthen initiatives to ensure strict legal and ethicalcompliance across the Sumitomo Chemical Group,
including subsidiaries and affiliates around the world,
along with achieving safe and stable operations by

Sumitomo Chemical 100 Years

reinforcing its safety culture and enhancing safetyassurance capabilities.
For a Better Tomorrow
Toward Sumitomo Chemical’s next 100 years
beginning in 2015, Sumitomo Chemical is fully applying all of its resources to contribute to a sustainable
society and to realize strong advances in the future,
based on the Corporate Slogan of “Creative Hybrid
Chemistry For a Better Tomorrow.”
Sumitomo Chemical practices sustainable chemistry as part of its CSR-based management to achievea balance among the three areas of economy (business), Responsible Care (safety, environment, productquality), and society (benefiting society) in all aspectsof its corporate activities.
People in the world today face many problems thatare difficult to solve, beginning with the environmental
issues of resources and energy, food supply, and others. Sumitomo Chemical has drafted a medium-term
corporate business plan from FY 2013 that aims topromote next-generation businesses through the promotion of “Creative Hybrid Chemistry” by focusing on
three key areas of environment and energy, life sciences, and ICT, to develop value-added products andtechnologies. In addition, the commitment describes
the desirable future direction of Sumitomo Chemical
to be a diversified global chemical company thatwill progress with confidence to achieve sustainablegrowth together with society, contributing to increasing affluence and the resolution of global challenges
facing humanity. Acting on this basic philosophy, theSumitomo Chemical Group takes as its mission contributing to the society to which it belongs, using its
strength in the diverse fields of chemistry. With thisgoal before it, Sumitomo Chemical steps confidently
into the next 100 years.

Touch sensor panel

Anode
CathodeSeparator

Heat resistant separator

Organic thin-film solar cell

Agrochemical evaluation test in greenhouse

PLED exhibit (Designed by Motoko Ishii Lighting Design Inc.)

47

Reports from Regional Headquarters

Report from Beijing
by Sumitomo Chemical (China) Co., Ltd.
Major Group Companies in China
Number of
employees*

FoundedZhuhai Sumika Polymer Compounds Co., Ltd.

152

May 2005

Manufacturing and sales of polypropylene
compounds

NOC Asia Limited

19

October 2009

Sales of propylene oxide

Sumika Polymer Compounds Dalian Co., Ltd.

42

September
2011

Manufacturing and sales of polypropylene
compounds

Jilin Dongcheng Sumika Polymer Compounds Co., Ltd.

126

August 2011

Manufacturing and sales of polypropylene
compounds

Sumika Electronic Materials (Wuxi) Co., Ltd.

803

July 2004

Manufacturing of optical functional films andlight diffusion plates

Sumika Electronic Materials (Shanghai) Co., Ltd.

30

September
2001

Manufacturing and sales of optical functionalfilms

Sumika Electronic Materials (Shanghai) Corporation

102

February
2009

Sales of IT-related chemicals

Sumika Electronic Materials (Hefei) Co., Ltd.

7

October 2009

Manufacturing and sales of processing chemicals for LCD panels, sales of other LCD andsemiconductor-related materials

Sumika Huabei Electronic Materials (Beijing) Co., Ltd.

1

November
2009

Manufacturing and sales of polarizing films andcomponents used in LCD panels

Sumika Electronic Materials (Shenzhen) Co., Ltd.

11

February
2011

Business and technical assistance for IT-relatedmaterials

Sumika Electronic Materials (Xi’an) Co., Ltd.

55

November
2012

Manufacturing and sales of chemicals for semiconductor production processing

Shanghai Lifetech Household Products Co., Ltd.

28

November
1995

Sales and manufacturing of products relating tohousehold insecticides

Dalian Sumika Chemphy Chemical Co., Ltd.

42

April 2003

Manufacturing of crop protection chemicalintermediates

Dalian Sumika Jingang Chemicals Co., Ltd.

144

October 2009

Manufacturing and sales of methionine andhigh-performance greenhouse films

Sumitomo Chemical Shanghai Co., Ltd.

36

December
1997

Sales and development of crop protection
chemicals, feed additives and environmental
health products

Sumitomo Chemical (China) Co., Ltd.

25

June 2011

Regional Headquarters for China

Sumika Business Service (Dalian) Co., Ltd.

35

March 2013

Providing HR and accounting services to groupcompanies in China

Sumika Jingang Trading (Dalian) Co., Ltd.

7

January 2013

Sales of agricultural materials

Corporate

Health & Crop Sciences Sector

IT-related Chemicals Sector

Petrochemicals &Plastics Sector

SectorCompany nameBusiness description* The numbers of employees above are as of March 2014 not including dispatched or part-time personnel.

48

Sumitomo Chemical 100 Years

Consolidated Net Sales by Sector in China (FY 2013)(Unit: Billions of yen)

SectorNet sales

Basic Chemicals Sector

1.8

Petrochemicals & Plastics Sector

25.0

IT-related Chemicals Sector

73.5

Health & Crop Sciences Sector

15.6

The figure for Basic Chemicals Sector includes the net sales of the Basic Chemicals Sector of Sumitomo Chemical
Shanghai Co., Ltd.

Medium-term Economic Forecast andActivities of Group Companies: China
The twelfth five-year plan (2011-2015) by the
Chinese government had a goal of 7% averageannual growth for real GDP. From 2016 onward,
however, it is expected that China will have difficulty maintaining this steady growth and see a gentle
decline in pace.
There are three major factors for the slowing of
economic growth in China. The first is a serious pollution problem, the second is a tight energy supply,
and the third is the decrease in the working population (ages 15 to 64) projected to begin in 2015.
In spite of these restraining factors, new driversof economic growth such as increases in personal
consumption, development of tertiary industries, andexpanded development of inland regions are anticipated to support growth.
The Sumitomo Chemical Group is expanding
business in China as the market continues to grow,although at a slower pace than that in the past.
In the Petrochemicals & Plastics Sector, in 2005,
Sumitomo Chemical began operations in the cityof Zhuhai to produce and sell polypropylene compounds, mainly for automobile materials. In 2011,
Sumitomo Chemical built factories in Jilin Provinceand Dalian City. In Jilin, in particular, a joint venturewith a local Chinese corporation was establishedwith the objective of supplying high-performancematerials to Chinese automobile manufacturers,
which are expanding their presence in the domestic market. Sumitomo Chemical provides the joint
venture with the polypropylene compounding technology and its Chinese partner provides it with theknow-how to sell products to Chinese automobile
manufacturers. Sumitomo Chemical hopes to havesynergies created through this collaboration between
Japanese and Chinese companies.

In the IT-related Chemicals Sector, major clientcompanies with whom we have built good relationships have constructed factories in inland China.
Sumitomo Chemical established a production company in Xi’an City in 2012 to develop business ininland areas. Business bases already establishedin China are integrating marketing data, such as
client data and needs, to expand business for the
Sumitomo Chemical Group as a whole.
In 2003, the Health & Crop Sciences Sector
established a joint-venture company in Dalian City
with a powerful group of local companies to produce
agrochemical intermediates. In 2009, Sumitomo
Chemical formed a joint venture with another partner
to produce a feed additive and high-performancegreenhouse films. In 2013, another joint venture withthe same partner was founded to expand the salesof high-performance greenhouse films, as well as
sell high value-added agricultural materials, the market of which is viewed as promising.
The Sumitomo Chemical Group has established four Regional Headquarters, for China, forSoutheast Asia/South Asia/Oceania, for Europe
and Turkey, and for North America. These Regional
Headquarters will act as Sumitomo Chemical’s
regional representatives in the regions and support
Group companies by assisting in their businessplanning for the regions and by providing various
professional corporate services and support in areas
such as HR, accounting, information technology, andbusiness compliance, which are key to sustainable
and efficient business operations.
In China, Sumitomo Chemical (China) Co., Ltd.
was established in June 2011 to serve as Regional
Headquarters.

49

Reports from Regional Headquarters

Report from Singapore
by Sumitomo Chemical (Asia Pacific) Pte Ltd
Major Group Companies in Southeast Asia, South Asia and Oceania

Corporate

Health & Crop Sciences Sector

Petrochemicals & Plastics Sector

Basic Chemicals Sector

SectorNumber of
employees*

FoundedBusiness description

Sumitomo Chemical Singapore Pte Ltd

122

July 1996

Sales of MMA monomer and polymer, crop
protection chemicals, IT-related chemicals andother products

Singapore Methyl Methacrylate Pte. Ltd.

119

July 1996

Manufacturing and sales of MMA monomer andpolymer

Sumipex (Thailand) Co., Ltd.

332

May 2002

Production and sales of MMA cast sheets

Bara Chemical Co., Ltd.

152

February
1973

Manufacturing and sales of textile finishing resins and rubber chemicals

Sumika Polymer Compounds (Thailand) Co., Ltd.

76

September
2008

Manufacturing of polypropylene compounds

Sumitomo Chemical Asia Pte. Ltd.

106

July 1990

Sales of petrochemical products

Petrochemical Corporation of Singapore (Pte.) Ltd.

361

August 1977

Manufacturing and sales of ethylene and propylene, etc.

The Polyolefin Company (Singapore) Pte. Ltd.

361

May 1980

Production and sales of polyethylene, polypropylene, etc.

Sumitomo Chemical India Private Limited

367

April 2000

Sales, development, manufacturing and registering of crop protection chemicals and household insecticides

Sumitomo Chemical Australia Pty Ltd

21

January 1998

Sales of crop protection chemicals and environmental health products

Sumitomo Chemical Enviro-Agro Asia Pacific Sdn. Bhd.

26

October 1996

R&D center for Health and Crop Sciences Sector

Sumitomo Chemical (Thailand), Co., Ltd.

2

January 2008

Registration and sales of crop protection chemicals and environmental health products

Sumitomo Chemical Philippines Inc.

4

March 2008

Registration and promotion of crop protection
chemicals and environmental health products

Sumitomo Chemical Vietnam Co., Ltd.

48

July 2008

Sales of crop protection chemicals

Sumitomo Chemical (Asia Pacific) Pte Ltd

23

March 2013

Regional Headquarters for Southeast Asia,
South Asia and Oceania

S.C.C. Insurance Pte. Ltd.

0

January 1997

Insurance

Company name

* The numbers of employees above are as of March 2014 not including dispatched or part-time personnel.

50

Sumitomo Chemical 100 Years

Consolidated Net Sales by Sector in Southeast Asia,
South Asia and Oceania (FY 2013)(Unit: Billions of yen)

SectorNet sales

Basic Chemicals Sector

50.8

Petrochemicals & Plastics Sector

295.1

IT-related Chemicals Sector

1.7

Health & Crop Sciences Sector

26.1

The figure for IT-related Chemicals Sector includes the net sales of the IT-related Chemicals Sector of Sumitomo
Chemical Singapore Pte Ltd

Medium-term Economic Forecast andActivities of Group Companies:
Southeast Asia, South Asia and Oceania
This region is mainly made up of the ASEAN blocof 10 countries with a population of 600 million people
and a GDP of US$2.1 trillion, South Asia with a population of 1.2 billion and a GDP of US$1.9 trillion in thelargest country India, and Oceania primarily Australia
and New Zealand.
Although the region experienced a period ofsluggish growth during the global recession in late2011, the ASEAN countries saw growth of 5 to 6%
in FY 2012 due to robust domestic demand. India,
Indonesia, and Thailand saw a slowing of growth rates
in FY 2013 but recovery is forecast for FY 2014, with
about 5% growth for India and 5 to 6% growth for the
ASEAN countries.
Even in the medium to long term, it is expectedthat the Southeast Asia, South Asia and Oceania markets will remain as attractive global production bases
because they have the advantage of an abundant
workforce due to population increase. With its potential as a huge consumption market, the position of
ASEAN is also expected to rise in the global economy.
The Sumitomo Chemical Group has recognizedSoutheast Asia as a market with high potential andfocused on business expansion since Sumitomo
Chemical entered the region in the 1970s, beginning with a petrochemical complex. In South Asia,
Sumitomo Chemical has entered the Indian market inrecent years and is expanding its presence there.
In the Petrochemicals & Plastics Sector, Singapore
Petrochemical Complex began operation in 1984 withtwo core companies, both Sumitomo Chemical Group
companies: Petrochemical Corporation of Singapore(Pte.) Ltd., an ethylene center, and The Polyolefin
Company (Singapore) Pte. Ltd., a polyolefin manufacturer. In 1994 the expansion of the complex, known as
the Complex II project, was launched. Complex II wasstarted in 1997 with a total capacity of approximately 1
million tons of ethylene. Recently, Sumitomo Chemical
Asia Pte. Ltd. in Singapore, which sells products manufactured at Petro Rabigh in Saudi Arabia, constructedfacilities at the end of 2013 to produce S-SBR used
for fuel-saving tires as demand for such tires is seeing

remarkable growth.
In the Basic Chemicals Sector, the MMA and acrylic acid businesses were developed taking advantageof the Complex II project. Sumitomo Chemical established Sumitomo Chemical Singapore Pte Ltd to manage the MMA business.
In the Health & Crop Sciences Sector, ever since a
local company was established in Singapore in 1990
for sales and marketing of household insecticides,
the sector has developed the markets in Southeast
Asia with subsidiaries in Singapore and Malaysia. In
2008, subsidiaries were established in Thailand, thePhilippines, and Vietnam as well, to hold the registrations and promote the sales of household insecticides and other crop protection products. In 2000,
Sumitomo Chemical India Private Limited was established in Mumbai, with an eye toward improving thefood supply and contributing to the improvement oflifestyle of India, a country with a population of morethan 1.2 billion. At present, this Indian subsidiary plays
an important role in expanding sales of agrochemicals,household insecticides, and other products in the
country. In Australia, Sumitomo Chemical Australia Pty
Ltd was established to promote the use of agrochemicals and household insecticides in Oceania.
The Southeast Asia, South Asia and Oceania
region will continue to play a major role in the global
strategy of the Sumitomo Chemical Group. In April
2013, Sumitomo Chemical (Asia Pacific) Pte Ltd wasestablished in Singapore as Regional Headquartersthat will support Sumitomo Chemical’s business development in this high-growth region by securely capturing emerging business opportunities, accelerating new
business undertakings, and also serving to have various business operations implemented more efficiently
and effectively.
Sumitomo Chemical has positioned Singapore as
the regional base for training in leadership skills andnecessary competencies in order to enable participating leaders to exercise their full potential in theexecution of their responsibilities. Sumitomo Chemical
Training Institute (SCTi) was opened in Singapore in
2012, and Sumitomo Chemical (Asia Pacific) Pte Ltd isin charge of its operations. It is Sumitomo Chemical’s
first overseas training center for human resource development.

51

Reports from Regional Headquarters

Report from Brussels
by Sumitomo Chemical Europe S.A./N.V.
Major Group Companies in Europe and Turkey
Number of
employees*

FoundedBusiness description

Sumika Ceramics Poland Sp.zo.o.

11

September
2011

Manufacturing and sales of diesel particulate
filters (DPF)

Sumika Polymer Compounds Europe Ltd.

3

September
2007**

Holding company of Sumika Polymer
Compounds (UK) Ltd and Sumika Polymer
Compounds (France) SA

Sumika Polymer Compounds (UK) Ltd

60

September
2007**

Manufacturing and sales of polypropylene
compounds

Sumika Polymer Compounds (France) SA

34

September
2007**

Manufacturing and sales of polypropylene
compounds

Sumitomo Chemical (U.K.) plc

14

February
1988

Sales of household insecticides and financing

Sumitomo Chemical Agro Europe S.A.S.

36

October 1990

Development and sales of crop protection
chemicals

Sumitomo Chemical Italia S.r.l.

71

December
1993

Development and sales of crop protection
chemicals

Kenogard S.A.

42

December
1981

Development and sales of crop protection
chemicals

Philagro Holding S.A.

0

September
1993

Equity holder in Philagro France S.A.S.

Philagro France S.A.S.

56

June 1993

Development and sales of crop protection
chemicals

Sumitomo Chemical Europe S.A./N.V.

46

October 1994

Regional Headquarters for Europe and Turkey
Sales of chemical products

Cambridge Display Technology Ltd.

102

January 1992

R&D and licensing in polymer organic lightemitting diodes (PLED) for displays and lighting
as well as other plastic electronic applications

Sumitomo Chemical Turkey A.S.

2

November
2013

Sales of chemical products

Corporate

Health & Crop Sciences Sector

Petrochemicals &Plastics Sector

Basic
Chemicals
Sector

SectorCompany name

* The numbers of employees above are as of March 2014 not including dispatched or part-time personnel.
** The date of acquisition by Sumitomo Chemical

52

Sumitomo Chemical 100 Years

Consolidated Net Sales by Sector in Europe andTurkey (FY 2013)(Unit: Billions of yen)

SectorNet sales

Basic Chemicals Sector

5.3

Petrochemicals & Plastics Sector

39.8

IT-related Chemicals Sector

2.4

Health & Crop Sciences Sector

46.7

The figure of IT-related Chemicals Sector includes the net sales of IT-related Chemicals Sector of Sumitomo
Chemical Europe.

Medium-term Economic Forecast andActivities of Group Companies: Europe andTurkeyEconomic recovery in Europe is projected to takemany years. The EU is taking measures to deal withbad debt in Greece, unstable banks in Spain, and theso-called sovereign risk, but fundamental solutions
are still to come. Unemployment in the EU countries
is acute. It has reached approximately 11% in theregion, and is higher than 25% in Greece and Spain.
In these two countries, over 50% of the youths aged
twenty-five and under is jobless. In Italy, this figure isabout 40%.
In 2010, the EU formulated “Europe 2020” as
the EU’s growth strategy up to the year 2020. This
includes increasing employment rate, promoting
research and development, decreasing greenhousegas emissions, and others. In July 2013, Croatia
became the twenty-eighth member of the EU, andTurkey and former Eastern European bloc countries
are under consideration for membership, indicating that the EU continues to be a centripetal force.
Negotiations for free trade with Japan and the UnitedStates are ongoing, and the EU is doing what it can
to expand markets in and outside the region to reactivate its economy.
Although the European region is plagued by economic uncertainty, it is still an advanced and enormous market with 500 million people. The Sumitomo
Chemical Group will continue to position it as animportant region, planning proactive business activities.

Concerning the Petrochemicals & Plastics Sector,
in 2007, plants to produce polypropylene compounds for automobiles and home electrical appliances were acquired in the United Kingdom andFrance, contributing to business development.
In the IT-related Chemicals Sector, the focus ison expanding the sales of high-performance polymers. In the fields of advanced materials, Cambridge
Display Technology, Ltd. in the United Kingdom,a pioneer in polymer organic light emitting diode(PLED) technology, was made a wholly-owned subsidiary in 2007, promoting the development of materials and devices for PLED display and lighting.
The Health & Crop Sciences Sector establishedsubsidiaries for development and sales in the mainmarkets in Europe of France, Spain, Italy and theUnited Kingdom, as well as in South Africa, todrive the market-based sales and promotion of the
products. Through this sales network, Sumitomo
Chemical sells not only its own agrochemicals but
also the products of Nufarm Ltd., an Australian company in which Sumitomo Chemical’s ownership is23%. Sumitomo Chemical engages also in expanding sales of methionine, a feed additive.
For Europe and Turkey, Sumitomo Chemical
Europe S. A . / N.V. wa s de signate d Re gional
Headquarters in January 2014.

In the Basic Chemicals Sector, Sumitomo
Chemical has been selling resorcinol and dyes, andin 2013, it completed a DPF (diesel particulate filter)
plant in Poland. As new and stricter vehicle emission
regulations are enacted in Europe, the Sumitomo
Chemical Group will actively market DPF, targeting it
to be one of the core businesses in the future.

53

Reports from Regional Headquarters

Report from New Yorkby Sumitomo Chemical America, Inc.
Number of
employees*

FoundedSumika Polymer Compounds America, Inc.

48

August 2007

Manufacturing and sales of polypropylene
compounds

Sumika Polymers North America Inc.

16

November
2011

Sales of polypropylene compounds

Sumika Electronic Materials, Inc.

55

January 2003

Manufacturing and sales of MOEPI wafers andother IT-related materials

Health &Crop Sciences Sector

Valent U.S.A. Corp.

242

April 1988

Development and sales of crop protection
chemicals

Valent BioSciences Corp.

137

January 2000

Development, sales and manufacturing of crop
protection chemicals and biorationals

McLaughlin Gormley King Company

108

April 1908

Development and sales of household insecticides

Corporate

Major Group Companies in North America

Sumitomo Chemical America, Inc.

28

May 1976

Regional Headquarters for North America
Sales of chemical products

Sumitomo Chemical Capital America, Inc.

0

April 1997

Financing

IT-related
Chemicals Sector

Petrochemicals& Plastics Sector

SectorCompany nameBusiness description* The numbers of employees above are as of March 2014 not including dispatched or part-time personnel.

Valent BioSciences Corp. (VBC)

VBC Research Center

54

Sumitomo Chemical America, Inc.

Sumitomo Chemical 100 Years

Consolidated Net Sales by Sector in North America (FY 2013)(Unit: Billions of yen)

SectorNet sales

Basic Chemicals Sector

2.1

Petrochemicals & Plastics Sector

11.8

IT-related Chemicals Sector

2.4

Health & Crop Sciences Sector

77.4

The figure for Basic Chemicals Sector includes the net sales of the Basic Chemicals Sector of Sumitomo Chemical
America, Inc.

Medium-term Economic Forecast andActivities of Group Companies: North America
Following the 2008 Lehman Brothers financial
crisis, the real GDP of the United States went into
negative growth in 2008 and 2009. In 2010, it recovered to 2% growth. Low growth, however, continued,
with real GDP of only 2.2% in 2012. Factors behind
this sluggish growth included the European debt crisis, US financial problems, delays of improvement inhousing and labor markets, and weak growth in personal income and consumption. According to corporate economic forecasts (Blue Chip survey in March),
growth will be 1.9% in 2013 and 2.7% in 2014, witha sluggish economy continuing in 2013 but some
improvement the following year.
Medium-term to long-term growth is forecast
to be driven by (1) abundant agricultural resources,(2) natural energy resources, such as shale gas,
(3) a steady growth in population (1% a year, for
an increase of three million a year), (4) excellent
research institutes to accelerate innovations, and (5)proximity to South America, a growing market. Since
the late 1990s, in particular, progress in excavation
technology has meant a rapid increase in shale gas
production that could make the United States aleading exporter of natural gas. This should improve
employment opportunities and play a part in boosting real GDP.

ical pesticide and post-harvest processing businesses as the agriculture-related markets were expected
to grow. In the field of household insecticides, in
2012, Sumitomo Chemical acquired a majority shareholding in the sales affiliate to strengthen its business foundation in the United States.
Concerning the Petrochemicals & Plastics Sector,
Sumitomo Chemical has focused on the businessesof polypropylene compounds and TPE, high-performance materials, used in automobile parts as
demand for them is expected to grow in the UnitedStates. Sumitomo Chemical has manufacturingbases in the United States and will expand the production capacity to meet increased demand.
In the IT-related Chemicals Sector, Sumitomo
Chemical affiliates in the United States are manufacturing and selling materials used to make semiconductors and electronic components for smartphones
and tablet computers.
In 1976, Sumitomo Chemical America, Inc. (SCAI)
was founded in New York to represent the Sumitomo
Chemical Group companies in the United States.
SCAI collects and dispatches information on economic and political trends, studies and analyzes
trends in technology, and builds and maintains relationships with international organizations, such as
the United Nations. In January 2014, SCAI became
Regional Headquarters for North America.

The Sumitomo Chemical Group puts its highest
level of priority on the US market due to the size ofits market and potential for growth in the medium
to long term. All Business Sectors are taking strong
initiatives.
In the Health & Crop Sciences Sector, Sumitomo
Chemical established Valent U.S.A. Corp. in 1988 tocommence agrochemical development and sales,
which enabled Sumitomo Chemical to make a fullscale entry into the US market. After that, strategic
mergers and acquisitions were made to enter biolog-

55

The Sumitomo Spirit and Sumitomo Chemical’s
Business Philosophy
The Sumitomo Spirit
Sumitomo’s Business Principles
1. Sumitomo shall achieve prosperity based on solid foundation byplacing prime importance on integrity and sound managementin the conduct of its business.
2. Sumitomo’s business interest must always be in harmony with public
interest; Sumitomo shall adapt to good times and bad times
but will not pursue immoral business.

Sumitomo Chemical’s Business Philosophy
1. We commit ourselves to creating new value by building on innovation.
2. We work to contribute to society through our business activities.
3. We develop a vibrant corporate culture and continue to be a company
that society can trust.

Sumitomo Chemical’s Business Philosophy is embodied in these three sentences.
Such management principles as “placing prime importance on integrity and soundmanagement” and “adapting to good times and bad times and not pursuing immoral
business” were first seen in the “Rules Governing the Sumitomo family” enacted in
1882.
Other business teachings that Sumitomo passed from one generation to the next
include “giving back to the state and society” and “mutual prosperity, respect for the
public good.”
Sumitomo Chemical took a fresh look at its fundamental business principles, mission
and values, and committed them to writing.

56

Sumitomo Chemical 100 Years

Recent Sales and Profits(Unit : Billions of yen)
2010/3
Actual2011/3
Actual2012/3
Actual2013/3
Actual2014/3
ActualNet sales*
Basic Chemicals

¥

203.3

¥

248.5

¥

284.3

¥

263.5

¥

286.9

Petrochemicals & Plastics

481.5

649.9

672.4

693.9

792.0

Fine Chemicals

86.7

88.9

-

-

-

IT-related Chemicals

265.2

322.3

293.1

300.0

362.3

Agricultural Chemicals (Health & Crop Sciences)

211.5

215.8

264.1

262.6

327.0

Pharmaceuticals

267.5

365.9

380.5

378.6

418.8

Others

105.1

91.2

53.4

54.0

56.8

Total

1,620.9

1,982.4

1,947.9

1,952.5

2,243.8

Basic Chemicals

1.3

21.3

9.3

(6.4)

(10.9)Petrochemicals & Plastics

(0.2)

11.1

6.2

(3.2)

4.9

Fine Chemicals

3.6

0.1

-

-

-

Operating income (loss)*

IT-related Chemicals

6.3

26.1

11.0

11.7

34.9

Agricultural Chemicals (Health & Crop Sciences)

29.3

22.4

26.5

26.3

38.2

Pharmaceuticals

29.9

26.9

20.9

30.9

47.1

Others

6.7

5.8

7.7

8.0

8.4

Elimination(25.4)(25.8)(20.9)(22.2)(21.8)

Total

51.5

88.0

60.7

45.0

100.8

Ordinary income

35.0

84.1

50.7

50.3

111.1

Net income (loss)
Assets

14.7

24.4

5.6

(51.1)

37.0

2,383.9

2,367.3

2,337.0

2,472.1

2,788.5

Shareholders' equity/Net assets

821.4

758.9

720.9

747.5

934.5

Interest-bearing debt

997.9

1,040.3

1,053.0

1,060.6

1,074.6

D/E ratio (times)

1.2

1.4

1.5

1.4

1.1

Shareholders' equity to total assets (%)

24.1

22.1

20.8

20.1

23.1

Net income (loss) per share (yen)

8.92

14.86

3.42

(31.25)

22.62

Dividend per share (yen)

6.00

9.00

9.00

6.00

9.00

Capital expenditures

103.2

98.7

155.1

116.1

143.4

Depreciation and amortization

116.1

147.0

114.9

115.5

115.7

R&D expenses

117.3

138.1

122.3

125.0

141.3

2.6

4.5

1.1

(10.4)

6.5

ROE (%)ROA (%)

0.7

1.0

0.2

(2.1)

1.4

Employees

27,82829,382

29,83930,39630,745

143

146

145

162

164

Consolidated subsidiaries* As of April 1, 2011, Fine Chemicals segment was eliminated and reorganized. The business in this segment was transferred to Basic Chemicals segment or Agricultural Chemicals segment. Following thischange Agricultural Chemicals segment changed its name to "Health & Crop Sciences" segment.

57

Sumitomo Chemical Locations in Japan(as of Jul. 1, 2014)

Misawa Works

Nagoya Branch Office

Gifu Plant
Head Office (Osaka)

Okayama Plant

Tsukuba Material Development Laboratory
Advanced Materials Research Laboratory
IT-related Chemicals Research Laboratory(Tsukuba)

Oita Works

Fukuoka Branch Office
Chiba Works
Industrial Technology & Research Laboratory (Chiba)
Petrochemicals Research Laboratory

Head Office (Tokyo)
Osaka Works
Industrial Technology & Research Laboratory (Osaka)
Organic Synthesis Research Laboratory
Environmental Health Science Laboratory
Basic Chemicals Research Laboratory (Osaka)
IT-related Chemicals Research Laboratory (Osaka)
Utajima Pilot Production Dept.
Health & Crop Sciences Research Laboratory (Utajima)
Health & Crop Sciences Research Laboratory (Takarazuka)
Ehime Works
Ohe Works
Production & Safety Fundamental Technology CenterIndustrial Technology & Research Laboratory (Ehime)
Basic Chemicals Research Laboratory (Ehime)
IT-related Chemicals Research Laboratory (Ohe)58

Sumitomo Chemical 100 Years

Major Companies of Sumitomo Chemical Group:Japan (as of Jul. 1, 2014)
Basic Chemicals Sector

Health & Crop Sciences Sector

Taoka Chemical Co., Ltd.

Koei Chemical Co., Ltd.

Sumika Bayer Urethane Co., Ltd.

Sumika Technoservice Corporation

Sumika Acryl Co., Ltd.

SC Environmental Science Co., Ltd.

Sumika Chemtex Co., Ltd.

Sumika Agro Manufacturing Co., Ltd.

EGS Co., Ltd.

Sumika Green Corporation

Sumika Alchem Co., Ltd.

Sumika Agrotech Co., Ltd.

Asahi Chemical Co., Ltd.

SanTerra Co., Ltd.

Ceratec Co., Ltd.

Sumitomo Chemical Garden Products Inc.

Niihama Coal Center Co., Ltd.

Nihon Ecoagro Co., Ltd.

Nihon Methacryl Monomer Co., Ltd.

Rainbow Chemical Co., Ltd.

Sumika High-Purity Gas Company

Sumika Fukuei Agro K.K.

Nihon Ammonia Terminal Co., Ltd.

TS Agro K.K.
SUMIKA FARM Nagano Co., Ltd.

Petrochemicals & Plastics Sector

SUMIKA FARM Oita Co., Ltd.

Japan-Singapore Petrochemicals Co., Ltd.

SUMIKA FARM Yamagata Co., Ltd.

Nihon Singapore Polyolefin Co., Ltd.

SUMIKA FARM Mie Co., Ltd.

Nippon A&L Inc.

SUMIKA FARM Ibaraki Co., Ltd.

Nihon Oxirane Co., Ltd.

Oita General Service Co., Ltd.

Sumika Styron Polycarbonate Limited
Keiyo Ethylene Co., Ltd.

Pharmaceuticals Sector

Tobu Butadiene Co., Ltd.

Sumitomo Dainippon Pharma Co., Ltd.

Nihon Isobutylene Co., Ltd.

Nihon Medi-Physics Co., Ltd.

Evolue Japan Co., Ltd.
Sumika-Kakoushi Co., Ltd.

OthersThermo Co., Ltd.

Sumika Logistics Co., Ltd.

Sumika Middle East Co., Ltd.

Sumitomo Chemical Engineerig Co., Ltd.

Sumika Rabigh Industrial Park Development Co., Ltd.

Ciatec, Ltd.

Sumika Color Co., Ltd.

Sumitomo Bakelite Co., Ltd.

Sumika Plastech Co., Ltd.

Sumitomo Seika Chemicals Co., Ltd.

Chiba General Service Co., Ltd.

Shinto Paint Co., Ltd.
Sumitomo Joint Electric Power Co., Ltd.

IT-related Chemicals Sector

Sumika Finance Co., Ltd.

O.L.S. Co., Ltd.

Sumika Chemical Analysis Service, Ltd.

Sumika-Radel Company Ltd.

Sumika Real Estate Co., Ltd.

Sumika Assembly Techno Co., Ltd.

Career Support Co., Ltd.
Sumika Human Support Co., Ltd.
Sumika Technical Information Service, Inc.
Osaka General Service Co., Ltd.
Sumitomo Chemical Systems Service Co., Ltd.
CO2 M-Tech Co., Ltd.
Sunrise farm Saijo Co., Ltd.
Sunrise Saijo Processing Center Co., Ltd.
Sunrise farm Toyota Co., Ltd.

59

Major Companies of Sumitomo Chemical Group:
International (as of Jul. 1, 2014)
Basic Chemicals Sector
Sumika Ceramics Poland Sp. zo.o.
Sumitomo Chemical Singapore Pte Ltd
Singapore Methyl Methacrylate Pte. Ltd.
Sumipex (Thailand) Co., Ltd.
Bara Chemical Co., Ltd.
Sumipex TechSheet Co., Ltd.
LG MMA Corp.
New Zealand Aluminium Smelters Ltd.

Petrochemicals & Plastics Sector
Sumika Polymers North America Inc.
Sumika Polymer Compounds America, Inc.
Sumika Polymer Compounds Europe Ltd.
Rabigh Refining and Petrochemical Company
Rabigh Conversion Industry Management Services Company
Sumitomo Chemical Asia Pte. Ltd.
Petrochemical Corporation of Singapore (Pte.) Ltd.
The Polyolefin Company (Singapore) Pte. Ltd.
Sumika Polymer Compounds (Thailand) Co., Ltd.
Jilin Dongcheng Sumika Polymer Compounds Co., Ltd.

60

Zhuhai Sumika Polymer Compounds Co., Ltd.
Sumika Polymer Compounds Dalian Co., Ltd.
NOC Asia Limited
Sumitomo Chemical Polymer Compounds Saudi Arabia
Company Ltd.
Sumika Polymer Compounds (UK) Ltd
Sumika Polymer Compounds (France) SA

IT-related Chemicals Sector
Sumika Electronic Materials, Inc.
Sumika Electronic Materials (Wuxi) Co., Ltd.
Sumika Huabei Electronic Materials (Beijing) Co., Ltd.
Sumika Electronic Materials (Hefei) Co., Ltd.
Sumika Electronic Materials (Shanghai) Co., Ltd.
Sumika Electronic Materials (Shanghai) Corporation
Sumika Electronic Materials (Shenzhen) Co., Ltd.
Sumika Technology Co., Ltd.
SSLM Co., Ltd.
Dongwoo Fine-Chem Co., Ltd.
Sumika Electronic Materials (Xi’an) Co., Ltd.

Sumitomo Chemical 100 Years

Health & Crop Sciences Sector
Valent U.S.A. Corp.
Valent BioSciences Corp.
Pace International, LLC
Sumitomo Chemical do Brasil Representações Limitada
Valent de Mexico S.A. de C.V.
Valent BioSciences de Chile S.A.
Kenogard S.A.
Sumitomo Chemical (U.K.) plc
Philagro France S.A.S
Sumitomo Chemical Agro Europe S.A.S.
Philagro Holding S.A.
Sumitomo Chemical Italia S.r.l.
Philagro South Africa (Pty) Ltd.
Vector Health International Ltd.
Sumitomo Chemical East Africa Limited
Sumitomo Chemical India Private Limited
Sumitomo Chemical Enviro-Agro Asia Pacific Sdn. Bhd.
Sumitomo Chemical (Thailand), Co., Ltd.
Sumitomo Chemical Philippines Inc.
Sumitomo Chemical Vietnam Co., Ltd.
Sumitomo Chemical Australia Pty Ltd
Dalian Sumika Jingang Chemicals Co., Ltd.
Dalian Sumika Chemphy Chemical Co., Ltd.
Sumitomo Chemical Shanghai Co., Ltd.

Shanghai Lifetech Household Products Co., Ltd.
Sumitomo Chemical Taiwan Co., Ltd.
Sumitomo Chemical Agro Seoul, Ltd.
McLaughlin Gormley King Company

Pharmaceuticals Sector
Sunovion Pharmaceuticals Inc.
Dainippon Sumitomo Pharma America Holdings, Inc.
Sumitomo Pharmaceuticals(Suzhou) Co., Ltd.
Boston Biomedical, Inc.

OthersSumitomo Chemical America, Inc.
Sumitomo Chemical Capital America, Inc.
Sumitomo Chemical Europe S.A./N.V.
Cambridge Display Technology Ltd.
S.C.C. Insurance Pte. Ltd.
Sumitomo Chemical (China) Co., Ltd.
Sumitomo Chemical (Asia Pacific) Pte Ltd
Sumika Jingang Trading (Dalian) Co., Ltd.
Sumika Business Service (Dalian) Co., Ltd.
Sumitomo Chemical Turkey A.S.

61

Chronology of Sumitomo Chemical
Year

Month

1590

Riemon Soga, who married the elder sister of Masatomo Sumitomo, begins a copper refining and smithing business in Kyoto.

c. 1600

Riemon Soga develops a technique (nanban-buki ) for separating silver from crude copper.

c. 1630

Masatomo Sumitomo takes a Buddhist name, Monjuin Kakyu, and begins a shop to deal in books and medicine in Kyoto.

1630

Tomomochi Sumitomo (eldest son of Riemon and son-in-law of Masatomo) relocates copper refining operations to Osaka.

1690

62

Tomoyoshi Sumitomo, the fourth generation in the family business, discovers copper in Besshi and opens the Besshi Copper Mine in 1691.

1891

Oct.

The House of Sumitomo changes its governing rules and establishes its “Business Principles.”

1893

Sep.

Gas emissions containing sulfur dioxide from the smelting plant causes damage to locally grown crops, and the local people petition theprefectural government (beginning of the gas emission pollution problem).

1905

Jan.

The smelting plant is moved to Shisaka Island, but the pollution worsens.

1911

AutumnTo rid of the polluting gas emissions, the decision is made to collect the sulfur dioxide and transform it into sulfuric acid, and use it to makecalcium superphosphate (fertilizer).

1913

Sep.

Sumitomo Fertilizer Works is formed in Niihama in Ehime Prefecture as a business directly operated by Sumitomo General Head Office.

1915

Oct.

Sumitomo Fertilizer Works, predecessor of Sumitomo Chemical and present-day Ehime Works, commences business (calcium superphosphateis shipped for the first time).

1925

Jun.

The Sumitomo Fertilizer Works, Ltd. is established as an independent company.

1931

Apr.

Full-scale production of ammonia and ammonium sulfate begins.

1934

Feb.

Company name is changed to Sumitomo Chemical Co., Ltd.

1934

Jun.

Sumitomo Aluminium Smelting Co., Ltd. is established.

1938

Apr.

Full-scale production of methanol and formalin begins.

1944

Jul.

Merger with Japan Dyestuff Manufacturing Company takes Sumitomo Chemical into dyestuffs and pharmaceuticals (present-day Osaka Worksand Oita Works).

1946

Feb.

Name is changed to Nisshin Chemical Co., Ltd.

1949

Nov.

All facilities of Sumitomo Aluminium Smelting Co., Ltd. are taken over.

1952

Aug.

Name is changed back to Sumitomo Chemical Co., Ltd.

1958

May

Full-scale production of ethylene and its derivatives (low-density polyethylene) begins in Ehime, and Sumitomo Chemical enters the
petrochemical business.

1962

Apr.

Sumitomo Chemical develops and begins sales of Sumithion, an organophosphorus insecticide for agricultural use.

1965

Nov.

Central Research Laboratory is established (subsequently renamed as Takatsuki Research Laboratory; closed in March 2003).

1965

Nov.

Sumitomo Chiba Chemical Co., Ltd. is established (merges with Sumitomo Chemical in Jan. 1975; present-day Chiba Works).

1970

Jan.

Sumitomo Chiba Chemical Co., Ltd. completes ethylene production facilities with annual capacity of 300,000 tons.

1971

Jul.

Takarazuka Research Laboratory is established, strengthening research capabilities for pharmaceuticals and agrochemicals.

1976

Jul.

Sumitomo Aluminium Smelting Co., Ltd, is established (Sumitomo Chemical transfers aluminum business to the company; the company isliquidated in 1986).

1977

Aug.

Petrochemical Corporation of Singapore (Pte.) Ltd. (PCS) is established.

1978

Jan.

Pyrethroid household insecticide production capabilities are strengthened when Misawa Works begins operations.

1980

May

The Polyolefin Company (Singapore) Pte. Ltd. (TPC) is established.

1982

Feb.

PT Indonesia Asahan Aluminium (INALUM) begins operations.

1983

Jan.

Ehime Works ethylene plant and derivative manufacturing plants are closed, and production is concentrated in Chiba Works.

1984

Feb.

Sumitomo Chemical and Inabata & Co., Ltd. jointly establish Sumitomo Pharmaceuticals Co., Ltd. (Sales begin in Oct. 1984.)

1984

Feb.

The Singapore Petrochemical Complex begins operations.

1985

Nov.

Ammonia production facilities discontinue operations (completely disengage from ammonia production) at Ehime Works.

1988

Apr.

Valent U.S.A. Corp. is established to develop and sell agrochemicals in the United States (becomes 100% subsidiary in Sept. 1991).

1989

Mar.

Tsukuba Research Laboratory is established.

Sumitomo Chemical 100 Years

Year

Month

1994

Apr.

The business of Sumitomo Chemical is reorganized into four sectors: Basic Chemicals, Petrochemicals & Plastics, Fine Chemicals andAgricultural Chemicals. The functions of manufacturing, sales & marketing, research & development and planning & coordination are
reorganized and integrated under each sector.

1994

Jul.

Sumitomo Chemical Agro Europe S.A.S. takes over agrochemical operations of Sumitomo Chemical France and Sumitomo Chemical UK, andmakes a start as the European base for agrochemical production, sales, and research & development.

1995

Dec.

All Sumitomo Chemical plants in Japan obtain ISO9002 certification.

1996

Jul.

Sumitomo Chemical Singapore Pte. Ltd. is established.

1997

Apr.

The second phase of the Singapore Petrochemical Complex begins operations. Combined with the first phase, annual capacity for ethylene
production reaches approximately 1 million tons.

1998

Oct.

Facilities for MMA monomer & polymer and acrylic acid in Singapore are completed.

1999

Mar.

All Sumitomo Chemical plants in Japan obtain international environmental management systems standards certification, ISO14001.

2000

Jan.

Biological pesticide business of Abbott Laboratories is acquired, and Valent BioSciences Corp. is established.

2000

Nov.

Announcement is made of planned comprehensive merger with Mitsui Chemicals, Inc. in 2003.

2001

May

Household insecticide business is acquired from Aventis Crop Science S.A.

2001

Oct.

The IT-related Chemicals Sector is established, and Sumitomo Chemical begins a six-sector organization: Basic Chemicals, Petrochemicals &Plastics, Fine Chemicals, IT-related Chemicals, Agricultural Chemicals, and Pharmaceuticals.

2001

Oct.

Olyset Net receives the world's first recommendation from WHO as a long-lasting insecticidal anti-malaria mosquito net.

2002

Nov.

Sumitomo Chemical’s joint venture Sumitomo Chemical Takeda Agro Co., Ltd. takes over the agrochemical business of Takeda PharmaceuticalCo., Ltd. (JV partner) and begins business (JV becomes wholly owned in Nov. 2007).

2003

Mar.

Merger with Mitsui Chemicals, Inc. is cancelled.

2003

Apr.

Dongwoo STI, a Korean subsidiary (established in April 2002; present-day Dongwoo Fine-Chem Co., Ltd.), begins operation of large-scale production
facilities for color filters for LCD panels.

2003

Jul.

Sumitomo Chemical Charter for Business Conduct is established.

2003

Sep.

Dongwoo Optical Films, a Korean subsidiary (established in Oct. 2002; present-day Dongwoo Fine-Chem Co., Ltd.), begins operation of comprehensive
production facilities for LCD polarizing films.

2004

Apr.

Subsidiary Sumika Technology Co., Ltd. (established in June 2001) in Taiwan begins operation of comprehensive production facilities for LCD
polarizing films.

2004

Jul.

Sumika Fine Chemicals Co., Ltd. merges with Sumitomo Chemical.

2004

Jul.

Sumika Electronic Materials (Wuxi) Co., Ltd. is established in Wuxi City in China as a production base for IT-related materials.

2005

Sep.

Rabigh Refining and Petrochemical Company (Petro Rabigh) is established as a fifty-fifty joint venture between Sumitomo Chemical and Saudi Aramco.

2005

Oct.

Sumitomo Pharmaceuticals Co., Ltd. and Dainippon Pharmaceutical Co., Ltd. merge to become Dainippon Sumitomo Pharma Co., Ltd.

2008

Jan.

Petro Rabigh is listed on the Saudi Arabian stock market.

2008

Mar.

Corporate Slogan and Corporate Statement are established.

2009

Jan.

Sumitomo Chemical's Business Philosophy is established.

2009

Apr.

The ethane cracker facilities, the main plant of the Petro Rabigh refining and petrochemical complex, begin operations.

2009

Oct.

Dainippon Sumitomo Pharma Co., Ltd. acquires US pharmaceutical company Sepracor, Inc. (present-day Sunovion Pharmaceuticals, Inc.)

2010

Apr.

Sumitomo Chemical purchases 20% of stock in Nufarm Limited of Australia.

2011

Feb.

Sunovion Pharmaceuticals, Inc., affiliate of Dainippon Sumitomo Pharma Co., Ltd., launches Latuda, a medication for schizophrenia, in the
United States.

2011

Apr.

The Fine Chemicals Sector is discontinued.
The business of Sumitomo Chemical is reorganized into five sectors: Basic Chemicals, Petrochemicals & Plastics, IT-related Chemicals, Health& Crop Sciences, and Pharmaceuticals.

2012

May

Plant to mass-produce touch sensor panels at Dongwoo Fine-Chem Co., Ltd. begins operations.

2012

May

Decision is made to proceed with Rabigh Phase II Project.

2013

Feb.

Discontinuation by Sept. 2015 of Chiba Works ethylene production facilities is announced.

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