MGC will shut Kashima polycarbonate plant by 2028 due to low profitability, shifting supply overseas and focusing on structural reforms.
Mitsubishi Gas Chemical Company, Inc. (MGC) has formally announced its decision to cease polycarbonate (PC) production at its Kashima Plant following a resolution passed at its Board of Directors meeting on March 31, 2026. The company confirmed that operations at the facility will be gradually wound down, with full discontinuation scheduled for March 2028. This move represents a significant step in MGC’s broader strategy to restructure its PC business and address ongoing financial and operational challenges.
The primary driver behind this decision is the persistent decline in profitability within the company’s polycarbonate segment. In recent years, the global PC market has experienced sustained pressure due to oversupply, which has led to weakened prices and reduced margins. As a result, MGC has found it increasingly difficult to maintain acceptable levels of capital efficiency at its Kashima facility. Recognizing these challenges, the company categorized its PC business as a priority area for intensive management under its medium-term management plan, MTMP 2026. This classification prompted a comprehensive review of operations and the initiation of structural reforms aimed at restoring competitiveness.
Despite undertaking multiple initiatives to improve operational efficiency and profitability across its production network, MGC has been unable to significantly enhance the performance of the Kashima PC plant. The facility has continued to operate with low returns, and the company has determined that prospects for meaningful improvement in the foreseeable future remain limited. Consequently, discontinuing production at this site has been identified as the most viable course of action.
Following the closure, MGC plans to maintain its domestic supply of polycarbonate by leveraging output from its overseas manufacturing bases. This approach will allow the company to continue serving its customers in Japan while optimizing its global production footprint. In parallel, MGC intends to advance its structural reform agenda by further rationalizing production capacity and increasing its focus on high-value-added products. These efforts are expected to strengthen the overall resilience and profitability of the PC business over time.
The Kashima facility currently has an annual production capacity of 120,000 tonnes, making it a notable component of MGC’s manufacturing operations. As the company moves forward with the discontinuation process, it has emphasized its commitment to supporting employees working at the plant. MGC has stated that it will prioritize continued employment opportunities for affected staff and ensure appropriate measures are taken to address workforce concerns during the transition.
In terms of financial implications, MGC is still in the process of assessing how this decision, along with other related factors, will impact its consolidated and non-consolidated financial results for the fiscal year ending March 31, 2026. The company has assured stakeholders that it will promptly disclose any material developments or information requiring public announcement as evaluations progress.
Overall, the planned shutdown of the Kashima polycarbonate plant underscores MGC’s proactive approach to addressing structural challenges within its portfolio. By streamlining operations and focusing on higher-value segments, the company aims to enhance long-term sustainability and align its business with evolving market conditions.
