Tokyo – Japanese chemicals and industrial group Ube Industries Ltd is splitting off its synthetic rubber (SR) business to create a new wholly owned subsidiary, Ube Elastomer Co. Ltd.
Effective 1 Oct, the move will create a “simplified incorporation-type spilt”, which will entail Ube’s SR production operations in Japan, Thailand, China and Malaysia, the company announced 30 April.
Ube noted that the SR business remains “an important cornerstone” of its business portfolio in the chemicals segment, despite the separation.
The Japanese supplier said the decision to carve out the business was made due to lower demand and greater global supply of SR in recent years, which had resulted in “stagnant profitability.”
The separation will create business entity that will independently operate the SR business, including related research and development, manufacturing, and marketing.
“By operating as an independent business entity, the synthetic rubber business will strictly manage its profitability and strive to accelerate its decision-making,” the statement added.
Ube’s SR business delivered sales of Yen27 billion (€205 million) in the fiscal year ended 31 March.
The new entity will be based in Tokyo and led by Hisaaki Yokoo who currently is the general manager of the SR division.
The unit manufactures polybutadiene rubber (BR) under the brand Ubepol BR.