Sumitomo Chemical and Zeon to form S-SBR JV

Sumitomo Chemical and Zeon Corporation have agreed to form a joint venture company by integrating their solution styrene butadiene rubber (S-SBR) businesses. 

Sumitomo Chemical’s S-SBR is used as a feedstock for fuel-efficient tyres. With heightening environmental awareness and tightening environmental regulations worldwide, demand for fuel-efficient tyres is likely to keep increasing steadily in the future, while competition in the marketplace is ever growing keener with many of the manufacturers expanding production capacities.

“Under the circumstances, Sumitomo Chemical and Zeon have been looking into various opportunities of co-operation, including developing new products to better meet customers’ needs by bringing their technologies together, increasing cost-competitiveness further, forming a new joint venture capable of strengthening the business through an ensured stable supply of products, or transferring their S-SBR business operations, including those of their respective affiliates, to a newly formed joint venture. After in-depth consideration, the two companies have recently agreed that certain synergistic benefits should accrue from integrating their businesses,” said the two companies in a press statement. 

As per the deal, Zeon will establish a new wholly owned subsidiary called ZS Elastomer Co Ltd (ZSE). Sumitomo Chemical and Zeon will then succeed the rights and obligations of the sales and R&D functions of each company’s respective S-SBR business to ZSE. Zeon Corporation will hold 60 percent stake in ZS Elastomer, while Sumitomo Chemical will own the remaining stake.