TOKYO—Japanese chemicals and industrial group Ube Industries Ltd. is splitting off its synthetic rubber business to create a new wholly owned subsidiary, Ube Elastomer Co. Ltd.
Effective Oct. 1, the move will create a "simplified incorporation-type split, which will entail Ube's SR production operations in Japan, Thailand, China and Malaysia, the company said April 30.
Ube said the SR business remains "an important cornerstone" of its portfolio in the chemicals segment, despite the separation.
The Japanese supplier said the decision to carve out the business was made due to lower demand and greater global supply of SR in recent years, which had resulted in "stagnant profitability."
The separation will create business entity that will independently operate the SR business, including related research and development, manufacturing and marketing.
"By operating as an independent business entity, the synthetic rubber business will strictly manage its profitability and strive to accelerate its decision-making," the statement said.
Ube's SR business delivered sales of $247 million in the fiscal year ended March 31.
The new entity will be based in Tokyo and be led by Hisaaki Yokoo, who currently is the general manager of the SR division.
The unit manufactures polybutadiene rubber (BR) under the brand Ubepol BR.