Core Viewpoint - Three major Japanese petrochemical companies, Mitsui Chemicals, Idemitsu Kosan, and Sumitomo Chemical, are merging their domestic plastics production operations to enhance competitiveness amid oversupply and competition from Chinese manufacturers [1][2]. Group 1: Merger Details - The companies have signed a memorandum of understanding (MoU) to merge their polyolefins operations, aiming to share costs and develop synergies in R&D, production, sales, and distribution [2]. - The merger will integrate Mitsui and Idemitsu's Prime Polymer Company joint venture with Sumitomo Chemical's polypropylene and linear low-density polyethylene (LLDPE) business, expected to be completed by April 2026 [3]. - The merger is projected to yield annual cost savings of approximately JPY 8 billion [3]. Group 2: Market Context - The decision to merge comes in response to a shrinking domestic market due to population decline and lifestyle changes, alongside oversupply from Chinese producers [4]. - Japan's Ministry of Economy, Trade and Industry estimates the country's total polyolefin production capacity at 5.8 million tons [4]. Group 3: Company Statements - Mitsui Chemicals president, Osamu Hashimoto, emphasized the necessity of strengthening the business base through collaboration with other companies [5].