Coordination of plant investment and growing overcapacity in the petrochemical industry following the recession cartel (1972-1985)

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  • 石油化学工業における投資調整と設備過剰の深化 : 不況カルテル締結後の投資活動とその帰結(1972～85年)
  • セキユ カガク コウギョウ ニ オケル トウシ チョウセイ ト セツビ カジョウ ノ シンカ フキョウ カルテル テイケツ ゴ ノ トウシ カツドウ ト ソノ キケツ 1972 85ネン

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This study seeks to elucidate the events that led the petrochemical (ethylene production) industry to suffer from overcapacity. It focuses on the period after 1972, when a recession cartel was formed among ethylene producers to mitigate overcapacity. Previous studies have attributed the industry's excess capacity to the excessive competition following the MITI's policy in 1967, by which the construction of new plants was limited to those capable of producing more than 300,000 tons annually, and as a result have seldom examined investment and coordination of investment by petrochemical firms during the period. This paper determines that plant investment after the formation of recession cartel did have a more substantial and negative impact on creating excess capacity than did the 300,000-ton production standard of the earlier period. This analysis reveals that despite chronic overcapacity and the formation of a recession cartel in 1972, plant investment continued. The major factor contributing to continued plant investment was the inability of mechanisms in place from the past to adapt to such changes in the environment as the end of the period of rapid economic growth and onset of the oil crisis.

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