 Operating profit expected to double YoY in 2017, to approximately \76bn.

 Korea-Japan R&D integration and operational know-how sharing leading to maximization of synergies... accelerating growth towards becoming a global major.

MCNS_(Mitsui Chemicals, Inc. & SKC Polyurethanes Inc., established July 2015), a polyurethane joint venture between SKC_(CEO Wan Jae Lee) and Mitsui Chemicals_(President & CEO Tsutomu Tannowa) of Japan, is showing rapid growth driven by JV synergies. MCNS is expected to operating profit of \76bn, up 100% from a year earlier. Total sales is expected to be \1.1tn which is similar to 2017. 

Rapid increase in operating results after JV... secured competitiveness through horizontal/vertical integration from raw material to product

Growth of MCNS is the result of synergies driven from the cooperation of SKC and Mitsui Chemicals. First, MCNS secured a stable business structure. Prior to the JV, both companies were not able to fully integrate the PU value chain. SKC had exposures in Polyol and Propylene Oxide (PO), but no isocyanate (TDI, MDI) capacity. Mitsui Chemicals had Polyol and Isocyanate, but no PO.

MCNS was able to vertically and horizontally integrate the PU value chain and enhance competitiveness.

Second, integration of Korea-Japan R&D capabilities is showing synergies. Case in point is “NextyolTM”, an environment friendly Polyol product. By improving the reaction texture, through combining the technical expertise of the two companies, MCNS was able to develop a product that emits 50% less VOC (volatile organic compounds, hazardous chemicals that cause new car/house syndrome) over conventional products.

With eco-friendly becoming a major global trend, MCNS is driving the volume growth of NextyolTM. MCNS is expanding domestic market share of NextyolTM and also testing the product with global auto parts manufacturer in the US, Germany and others. MCNS is also promoting application of NextyolTM on furniture, expanding sales volume.

Third, MCNS is strengthening its competitiveness through maximizing production efficiency of its 3 main production facilities located in Korea and Japan. Shifting product mix between plants in Ulsan, Nagoya and Tokuyama _ base_d on productivity, MCNS was able to maximize production volume.

Also, through mutual benchmarking and applying the process technologies of the 3 plants, MCNS is lowering production cost. With materialization of synergies as mentioned above, MCNS is expected to record doubled operating profit compared to last year. 

Realizing Vision 2020 through global expansion... reviewing new/expansion production capacity

In order to achieve Vision 2020 - targeting sales revenue of W2trn by 2020, MCNS plans to increase production capacity of Polyol (270K tons) and isocyanates (MDI 250K, TDI 120K tons). It is currently reviewing whether to expand capacity of the existing 3 Polyol plants in Korea and Japan or invest in a new production facility. It also plans to double the number of PU system house (PU manufacturing facility near global customers) from current 10 locations. 5 system houses will adopt smart factory functions, utilizing AI to maximize productivity. 

“We will continue to strive to maximize synergies, enhancing product competiveness and strengthening global marketing capabilities” said a MCNS spokesperson. “By addressing the customer needs of electronics/automobile manufacturers in Korea and Japan and adding capacity, we target to realize our Vision 2020 and grow to be a global PU maker” the person added. [END]