Mitsubishi Chemical Group will exit the coke and carbon materials business, citing structural market challenges and recording ¥85 billion in losses.
Mitsubishi Chemical Group (MCG) has announced a strategic decision to withdraw from the coke and carbon materials business, which includes products such as needle coke and pitch coke. The operations are currently conducted through its consolidated subsidiary, Mitsubishi Chemical Corporation. This move represents a significant step in the group’s ongoing portfolio restructuring as it seeks to strengthen long-term competitiveness and reduce exposure to volatile market segments.
As a result of the planned exit, MCG expects to incur a total non-recurring loss of approximately ¥85 billion. Of this amount, around ¥19 billion is projected to be recorded in the company’s third-quarter financial results for the fiscal year ending March 2026. The remaining estimated loss of roughly ¥66 billion is expected to be reflected in the fourth-quarter results of the same fiscal year. These losses are primarily associated with asset impairments, restructuring costs, and other one-time expenses related to the business withdrawal.
The decision aligns with MCG’s broader transformation strategy outlined in its long-term vision, “KAITEKI Vision 35,” as well as its “Medium-Term Management Plan 2029.” Under these frameworks, the company has been systematically reviewing its business portfolio to ensure alignment with future growth priorities, sustainability goals, and resilience against cyclical market risks. The exit from the coke and carbon materials segment is intended to mitigate earnings volatility and reallocate management resources toward businesses with stronger strategic fit and growth potential.
MCG cited a persistently challenging operating environment as a key driver behind the decision. The overseas coke market has been under prolonged pressure due to weak global steel demand, particularly stemming from reduced consumption in China. This situation has been further exacerbated by the commissioning of new large-scale coke production facilities in Indonesia, leading to intensified competition and structural oversupply in the market. Despite the company’s efforts to enhance profitability and leverage the quality advantages of its coke products, these structural challenges have shown no clear signs of improvement.
The carbon materials business has faced similar headwinds. Ongoing oversupply and sluggish demand have weighed heavily on market conditions, making it difficult to secure stable margins. Additionally, the production of carbon materials is closely linked to the operation of coke ovens. As a result, any decision to halt coke production would directly undermine the cost efficiency and viability of carbon materials manufacturing, further complicating prospects for sustainable operations in this segment.
Taking these factors into account, MCG conducted a comprehensive review of the coke and carbon materials Product Group from a medium- to long-term perspective. The evaluation was based on the company’s three core criteria for business selection: alignment with its corporate vision, the presence of a sustainable competitive advantage, and the potential for future growth. Following this assessment, MCG concluded that the Product Group no longer met these criteria and that achieving meaningful medium- to long-term growth would be difficult.
Consequently, Mitsubishi Chemical Group has decided to withdraw entirely from the coke and carbon materials business, marking a decisive step in reshaping its portfolio to focus on areas better aligned with its strategic ambitions and long-term value creation.
