Sumitomo Chemical transfers LCD business in China for restructuring

Sumitomo Chemical has decided to transfer its large-size liquid crystal display (LCD) polarizing film business in China to a polarizing film manufacturer in the country in which Hubei Sunnypol Optoelectronic Technology Co., Ltd. and Beijing Phoenix Tree Jiafeng Enterprise Management Consulting Co., Ltd. have invested. As a result, Sumitomo Chemical’s two consolidated subsidiaries related to this business will be excluded from the Company’s scope of consolidation. The business transfer and changes in consolidated subsidiaries is scheduled to be implemented on March 31, 2025. There is no revision to Sumitomo Chemical’s financial forecast for the full year ending March 31, 2025 in connection with this restructuring.

Sumitomo Chemical will transfer its large-size LCD polarizing film business in China to a local manufacturer, with subsidiaries Sumika Huabei and XUYOU Electronic Materials being excluded from the company’s consolidation.
This restructuring, effective March 31, 2025, aligns with Sumitomo’s shift towards high-growth areas like OLED and automotive polarizing films.

1. Reason for the transfer of equity interest

Sumitomo Chemical established Sumika Huabei Electronic Materials (Beijing) Co., Ltd. in 2009 and XUYOU Electronic Materials (Wuxi) Co., Ltd. in 2016 to meet increasing polarizing film demand driven by growth of China’s large-scale LCD industry. At its peak, its large-size LCD polarizing film business in the country grew to 100 billion yen in sales revenue.

However, in view of the changes in the business environment seen in recent years, such as the maturing of the large-size LCD polarizing film market in China, Sumitomo Chemical studied the possibility of restructuring the business by applying the best-owner principle, and it concluded that the restructuring including the transfer of its equity interest in subsidiaries to the local polarizing film manufacturer would be the best way forward.

Sumitomo Chemical is shifting the focus of its polarizing film business to areas in which the Company can leverage its technological advantages. The Company’s polarizing film sales in high-performance fields such as OLED and automotive applications have significantly increased over the past several years. As high market growth is anticipated in these areas, the Company will continue to step up product development and strengthen its supply chains, and strive to further expand the polarizing film business.

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Fibre2Fashion News Desk (HU)