Effective from April 1, Air Water (AWI) transfers to Nippon Steel & Sumitomo Metal Corporation (NSSMC) its coke-oven gas purification business and the related sales of by-products like crude benzene. Since 2014, Air Water has suffered from the bad profitability in the chemical business due to the dull market affected by the declined price of crude oil and the sluggish economy of the developing countries including China. By spinning off the business, Air Water plans to reorganize its chemical-related business. The transfer amount of about JPY15 billion is settled by cash.
　
Out of the transferred categories, the crude benzene business is shifted to Nippon Steel & Sumikin Chemical and the coke-oven gas purification business, and the related sales of by-products (crude benzene, sulfuric acid, ammonium sulfide or liquid ammonium) are transferred to
Nippon Steel & Sumitomo Metal Corporation.

Air Water’s turnover of the chemical business amounted to JPY34.854 billion FY2017 ending March with the operating profit of JPY883 million and the ordinary income of JPY974 million. Effective from April 6, C-Chem (invested 35% by the Air Water group) of J/V between AWI and NSSMC engaging in the tar distillation business will be fully owned by NSSMC terminating the joint business.

Air Water’s chemical-related business started in October 2002 with the coke-oven gas purification and the related sales business bought from Sumitomo Metals (formerly). It consists of so-called tar distillation business and the fine chemicals business including carbonic materials, medical agrochemical intermediates and electronic material intermediates. In October 2004, Air Water established C-Chem, as a J/V with Shin Nittetsu Chemical (formerly) to do the tar distillation business. As aforementioned, the coal chemical business out of the chemicals business, was put into a serious situation to get earnings on account of the lowered selling prices affected by the up-valued yen and the decreased prices due to the sluggish oil market. In the tar distillation business, there was a dull demand in needle cokes for the electrode of arc furnaces mainly in China.
C-Chem declared impairment in its Chinese affiliate in 2015. It made Air Water experience loss in its ordinary profits for two consecutive years in 2015 and 2016.
Nevertheless, the market environment is rapidly getting better with the improved market condition of products following the rise of oil price in early 2017. The fluctuation in the market still remains so large that Air Water forecasts the future business circumstances to be not necessarily stable.
In addition, considering that the products in the business are by-products from steel works largely affected by the exchange of foreign currencies and oil prices, Air Water has come to the decision to transfer the business.

At present Air Water is proceeding to affiliate completely Kawasaki Kasei which was transferred by Mitsubishi Chemical (formerly) in May 2015. From now on Air Water intends to focus its management resources on the field of functional chemicals like fine chemical and carbonic materials based on the company so that its chemicals-related business may be reorganized.