The Common Integration The Group Operation of Petrochemical Complexes in Japan

Abstract

Oil and petrochemical companies are in the severe situation where they shoulddeal with various problems. In Europe, America, the Middle East, and East Asia (China, Taiwan,and South Korea), one company usually builds a large-scale factory, and consistently producesoil and petrochemical goods in the system of one company. Differently from it, two or morecompanies are concentrated in the coast landfills in Japan, and generally manufacture in thesystem of groups. The system of production in a petrochemical complex would be a mediumscalelevel if it sees worldwide. After World War II, capital was insufficient in Japan. Manycompanies advanced to the oil and petrochemical industry which seemed to have a big future.Small and medium scale factories were constructed. As a result, petrochemical complexeshave been formed with the system of groups.After the defeat of World War II, many oil companies excluding Idemitsu Kosan Co., Ltd. wereorganized for the supply of crude oil from European and American oil majors. They weredevoted to refining oil and selling it only in Japan. Moreover, the oil market in Japan had beendefended by restriction of the government. Such a system continued for years. Therefore,domestic oil companies had been aiming at improvement and efficiency of refining capacity.Their concentrating on technological development, cost reduction, and domestic share foughtin the same industry had become a main activity. The construction of global competitiveness hadbeen postponed for a while. However, after repealing protected laws, the import liberalizationof petroleum product had been taken since 1996, and cheap petroleum products had flown infrom foreign countries. The sales price had not become the same, and free competition undermarket mechanism had started. As a result, the movement of industry reorganization hadbeen accelerated.In such a severe situation, oil and petrochemical companies came up with the idea of businesscooperation in the same region in order to acquire global competitiveness. 20 companies inoil industry and chemical industry gathered round at first. Under the Research Associationof Technology Law, Research Association of Refinery Integration for Group-Operation (RING)was established in 2000. In order to gain global competitiveness, RING has acted groupoperationprograms in the industrial complexes in Japan. In this paper, I describe the historicalformation and development of petrochemical complexes in Japan.And I consider and analyzethe approach to and ways of the high-level integration for group operation. And I will explainthe meaning of the plans, and the economies arising from the group operation business.