[Company analysis] Sumitomo Chemical Co., Ltd. (住友化学)

「Sumitomo Chemical Co., Ltd. (住友化学)」is one of Japan's leading comprehensive chemical companies which was established in 1913. Just like「Sumitomo Mitsui Financial Group, Inc.(三井住友フィナンシャルグループ)」and「Sumitomo Electric Industries, Ltd.(住友電気工業)」, Sumitomo Chemical is also Sumitomo Group's core company. It started as a fertilizer manufacturing plant, but now it ranks second in Japan after「Mitsubishi Chemical Holdings Corporation(三菱ケミカルホールディングス) 」in terms of sales volume alone. The number of consolidated employees is about 32,542.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Sumitomo Chemical Co., Ltd.
Company name (Japanese)	住友化学
Date of establishment	September 22, 1913
Headquarters location	〒104-8260 東京都中央区新川2丁目27番1号 東京住友ツインビル
Capital	89,699
Consolidated sales	2,318,600
Consolidated operating profit	183,000
Consolidated total assets	3,171,618
Consolidated capital	1,351,886
Capital adequacy ratio	42.6%
Consolidated number of employees	32,542

 

 

 

2. Summary and Features

 
For classification,「Sumitomo Chemical」is a general chemical company who has "upstream process" that produces basic products (naphthalene, ethylene, and benzene) from crude oil, and a "middle process" that produces plastics, synthetic fibers, and synthetic rubber both as their business areas. In fact, until 1990, most Japanese chemical companies handled all departments comprehensively, including「Sumitomo Chemical」. However, in order to survive international competition, they decieded to specialize in the areas where they have strengths. 

However,「Sumitomo Chemical」decided to maintains its position as a general chemical company who cover both upsteam and middle process and maintains a very broad product lineup. It is no exaggeration to say that there are no chemical products that this company does not produce. Cosidering the fact that 「Sumitomo Dainippon Pharma Co., Ltd.」is their subsidiary,  「Sumitomo Chemical」even can handle pharmaceuticals.

However, a distinctive feature of other general chemical companies is their aggressive overseas expansion. 「Sumitomo Chemical」is extremely active in overseas expansion, and as a result, sales overseas are higher than in Japan. At present, overseas sales account for more than 60% of the total. Given the fact that the same general chemical companies,「Mitsubishi Chemical(三菱ケミカル)」and「Mitsui Chemicals, Inc.,(三井化学)」 account for around 40% of overseas sales, we can say it is certainly a high percentage.

Besides, 「Sumitomo Chemical」has a partnership with「Samsung Electronics」. Current Samsung's smartphone models are equipped with a touch panel that was fabricated by Sumitomo Chemical . In other words, the more 「Samsung Electronics」sell the smartphone, 「Sumitomo Chemical」also can achieve higher volume of sales. As of 2011, Sumitomo Chemical built a factory in South Korea and is now producing and selling touch panel-related components locally.

In addition, 「Sumitomo Chemical」has agricultural business and this is an interesting part.  After the end of World War II, this company, which established its expertise in pesticides. Now, they have the world's top market share in raw materials for household and agricultural pesticides. In this field, market demand is expected to increase in developing countries in the future, so it is evaluated that future business expansion can be expected.

 

 

 

3. Major Business

 

■ Petrochemical Division

■ Energy / Functional Materials Division

■ IT-related Chemicals Division

■ Health / Agriculture Business

■ Pharmaceutical Division

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,939,100	2,190,500	2,318,600
Consolidated operating profit		126,500	262,700	183,000
Consolidated total assets		2,878,193	3,068,685	3,171,618
Consolidated net assets		1,115,903	1,252,214	1,351,886
Breakdown of sales	Petrochemical Division	557,900	674,100	757,500
	Energy / Functional Materials Division	206,400	251,000	282,900
	IT-related Chemicals Division	358,500	368,700	396,800
	Health / Agriculture Business	320,600	339,700	338,100
	Pharmaceutical Division	441,000	500,200	492,100
	Others	54,700	56,800	51,100