Our Roots A history of rising to the challenge vol.9
Finding Hope in a Period of Low Growth
Increased Efficiency and New Success in Petrochemicals

The first oil shock hit Japan hard, and in 1974 the nation suffered its first year of negative growth since World War II. The economy continued to struggle, forcing Japanese enterprises to remodel themselves in order to remain profitable. MC faced an additional challenge of maintaining its amicable relations with oil producing nations, which had rapidly grown in prominence following the oil shock.

Bunichiro Tanabe was appointed MC's president and CEO in May, 1974. He quickly launched measures to increase efficiency, addressing risk avoidance, financing, and human resources. He also established business investment regulations and the Advisory Committee on Investments and Loans. In this fashion he refined the corporate structure, allowing for more focused management and selective identification of large-scale projects.

MC also placed heavier emphasis on exporting petroleum products and power generation infrastructure, the aim being to maintain the company's good standing with oil producing nations. Meanwhile, more investments were made in other fields that were showing good potential for future growth. MC's investments in oil producing nations are perhaps best represented by the company's petrochemicals business in Saudi Arabia.

In 1970, MC and Mitsubishi Petrochemical (now Mitsubishi Chemical Corporation) began studying the feasibility of such a project. Striving to diversify the nation's oil-dependent economy, Saudi Arabia's General Petroleum and Mineral Organization (Petromin) had approached the Japanese side about a possible collaboration. MC set up a 40-member "Saudi Arabia Project Division" in 1974, and launched talks with Mitsubishi Petrochemical and Mitsubishi Oil (now JX Nippon Oil & Energy Corporation).

But in August 1976, after roughly two years of investigations, the project was suddenly put on hold. It was deemed unlikely to be profitable and the country risk too great. Officials in Saudi Arabia disagreed, and the issue soon became a heated topic at government level talks. Japanese politicians strongly urged the Mitsubishi consortium to move ahead with the plan, citing its value in securing a stable oil source. The Japanese government was brought in to shoulder a significant portion of the investment, and by narrowing down the scope of the business and securing additional partners, development took a major step forward. The national project was finally realized in 1981 with the establishment of the Eastern Petrochemical Company (SHARQ)*. To this day, petrochemical products from SHARQ continue to be sold worldwide.