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Himeji accident impacts Nippon Shokubai results
12:25 PM MST | February 7, 2013 | Deepti Ramesh
Nippon Shokubai recorded a 74% fall in net profits for its fiscal first 9 months, ended 31 December 2012, compared with the corresponding period of the previous fiscal year, to ¥4.4 billion ($47 million). Nine-month sales decreased 16%, to ¥204.4 billion.
Nippon Shokubai says that the financial impact of the explosion and fire at the company’s manufacturing complex at Himeji, Japan, on 29 September 2012, on the company’s results for the fiscal year ending 31 March will be about ¥21.5 billion. Nippon Shokubai was ordered to suspend operations at all the production facilities at its Himeji complex following the explosion and fire. The accident resulted in the death of one firefighter, as well as in several serious injuries. The company was given permission, separately last month, and in December and November 2012, to restart certain facilities at the complex. Operations at facilities in the Himeji complex that produce acrylic acid, acrylates, and superabsorbent polymers (SAP) remain suspended, and the company has not said when production at these facilities is likely to resume.
Nippon Shokubai is the leading producer of SAP, used to make diapers. The Himeji site is home to the company’s largest SAP facility, with a production capacity of 320,000 m.t./year, and accounts for about 18% of global capacity for SAP. Last December, Nippon Shokubai announced that its subsidiary NA Industries (Houston) has restarted an idled SAP plant at Chattanooga, TN, to supplement production capacity.
Nippon Shokubai announced its earnings and sales forecasts for the full fiscal year, ending 31 March. Nippon Shokubai expects to record a net profit of ¥1.0 billion for the full fiscal year, compared with a net profit of ¥21.3 billion in the previous fiscal year. Nippon Shokubai predicts full-year sales of ¥270.0 billion compared with sales of ¥320.7 billion in the previous fiscal year.
An accident investigation committee established by Nippon Shokubai, in its report submitted last month, says that a "boiling liquid expanding vapor explosion" had occurred in an intermediate tank in the acrylic acid production plant at the site; the tank had ruptured and the scattered contents were ignited, causing the fire.