Sumitomo Chemicals Targets Business Expansion Based On Development of New Manufacturing Method for Methionine and Vitamin A.

Business Editors

TOYKO, Japan--(BUSINESS WIRE)--Sept. 10, 2001

Sumitomo Chemical Co., Ltd., regards its feed additive business as one of its core businesses and has worked to expand production and sales of DL-methionine in powder form.

However, the Company has recently succeeded in creating technology for manufacturing liquid methionine analog (LMA) as a result of many years of manufacturing technology development.

DL-methionine is produced from special raw materials, such as acrolein, hydrocyanic acid, and methyl mercaptan. Sumitomo Chemical has the only plant in the world that integrates the entire manufacturing process for DL-methionine, from raw materials to end product, making it a highly competitive producer of the product globally. The current LMA manufacturing process developed by the Company produces a better quality product of clearer color than previous LMA. In addition, the Company is proud to note that the manufacturing method takes into account recycling measures and is an environmentally friendly process as well as being highly cost competitive.

The chief use of methionine in livestock feed is as a feed additive for raising chickens. Current global demand for this product is estimated to be over 400 thousand metric tons annually. With the growing population and rising personal incomes of developing economies and the growing health trend toward white meat in developed economies, demand for methionine is expected to rise steadily in line with expanding demand for chicken meat. In addition, there is a trend in developed economies toward increasing the proportion of amino acids in feeds to reduce the environmental problem caused by livestock excrement, providing another factor driving accelerated growth in demand for methionine.

Since approximately 40% of total methionine demand is for LMA because of its ease of use and other factors, Sumitomo anticipates that LMA will experience an even faster pace of growth in demand from large-scale chicken farms, located mainly in the United States.

Sumitomo Chemical's current annual production capacity for methionine is approximately 40 thousand metric tons. Facilities are already operating at full capacity, and new capacity will have to be added to meet the previously mentioned expansion in demand. To that end, Sumitomo plans to build a large-scale LMA plant using its new LMA manufacturing method with annual production capacity in several tens of thousands of tons as well as expanding its DL-methionine production capacity. Based on these additional facilities, the Company will be able to offer its customers methionine in liquid and powder forms and intends to further expand its supply of this highly competitive product to the market.

As a major source of demand, the United States is a main candidate for the location of the new LMA plant and expanded DL-methionine facilities. However, Sumitomo is also considering Asia, including Japan, as a possible site.

Because Sumitomo is considering a relatively large-scale plant, the Company intends to pursue the possibilities of commissioned production for other companies, joint production, and business alliances.

Through the process of further strengthening its feed additive business, Sumitomo has further established a new vitamin A production technology. The Company plans to use the completion of this technology as an opportunity to expand feed business operations, including the acquisition of overseas businesses.