Mitsubishi Chemical Group has dropped its plan to leave carbon materials at its Kagawa site. The company said it will keep making needle coke and pitch coke because it found it difficult to reach the performance it targets for its pitch-based carbon fiber using feedstock from other companies. The decision was taken at an executive officers' meeting on 5 November 2026.
Why the exit was reversed
On 2 February 2026 the group announced it would withdraw from coke and from carbon materials (needle coke and pitch coke) at its subsidiary Mitsubishi Chemical, and remove the equipment. The pitch-based carbon fiber business was to carry on, on the assumption that it would buy feedstock from other companies.
That assumption did not hold. After what the company calls a fresh review prompted by the rapid expansion of AI and data-center business, it found that achieving the target performance with other companies' feedstock is difficult. Management concluded that keeping the feedstock technology and equipment in-house is essential to the competitiveness of the carbon fiber.
What changes at Kagawa
The original plan was to stop production in the second half of the business year beginning April 2027, remove the equipment and end sales in stages. The revised plan maintains and renovates the equipment needed for carbon fiber feedstock. Needle coke and pitch coke production and sales continue, with one interruption: production will pause in the second half of the business year beginning April 2027 for renovation work, and a restart is expected in the second half of the business year beginning April 2028.
The company says it will discuss future dealings with customers individually. The notice sets no supply terms for the pause and gives no renovation cost.
The coke business still goes
The reversal covers carbon materials only. The separate coke business is still being exited as announced in February: production stops in the second half of the business year beginning April 2027, equipment removal follows, and sales end in stages.
Accounting effect
The group booked a restructuring provision of about ¥59.7bn in the previous fiscal year in connection with the February exit. Because part of the planned equipment removal costs and special retirement payments is no longer expected, it plans to book a reversal of about ¥9bn as non-recurring income in the third quarter of the year ending March 2027. The company says the exact amount is still being examined and that the effect is already in the full-year consolidated forecast it published the same day.
Where the carbon fiber is headed
The company says the decision will help stabilise the quality of its pitch-based carbon fiber and strengthen supply. It plans to speed expansion into 5G and 6G communications infrastructure, AI servers and data-center thermal management, as well as space uses that draw on the fiber's high elastic modulus and dimensional stability.