Japanese groups Ube Industries, JSR Corp. and Mitsubishi Rayon are going ahead with the proposed integration of their ABS resin businesses following approval from their respective boards on Mar. 30. The proposal was originally announced on May 9, 2016, and now with a shareholder agreement signed, the integration is set to take effect on Oct. 1, 2017, although this could be subject to change.

The move will see JSR’s subsidiary Techno Polymer absorb UMG ABS, which is equally owned by Ube Industries and Mitsubishi Rayon. Upon completion of the absorption-type split, Techno Polymer will allocate common shares to UMG ABS, so that on the day it takes effect JSR will own 51% and UMG ABS 49% of the new company which will have a capitalization of 3 billion yen. Techno Polymer will assume assets, liabilities, rights and obligations relating to UMG ABS’s manufacturing, research, development and sales of ABS, acrylonitrile ethylene styrene (AES) and acrylonitrile styrene acrylate (ASA) resins.

The companies said business conditions have become increasingly challenging for the ABS resin business, both in Japan and internationally. The aim of the integration is to optimize operations, enhance manufacturing efficiencies and secure cost competitiveness for the business in order to gain a stable supply in Japan and expand sales in global markets.