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| August 31, 1999 |
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| To Establish a Joint Venture for Plasticizers
Business |
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Mitsubishi Chemical Corporation
Kyowa Hakko Kogyo Co., Ltd. |
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Mitsubishi Chemical Corporation (President: Kanji Shono, headquartered in Chiyoda-Ku,
Tokyo) and Kyowa Hakko Kogyo Co., Ltd. (President: Tadashi Hirata, headquartered
in Chiyoda-Ku, Tokyo) announced today that both companies agreed to establish
a joint venture company (hereinafter called "Joint Venture") for both production
and sales of plasticizers, with the capital contributed equally by both companies.
The Joint Venture is scheduled to start business on January 1st, 2000 after the
parent companies transfer their domestic business of plasticizers to the Joint
Venture, so long as no questions arise in the course of deliberations by the Japan
Fair Trade Commission. The basic configuration and operation of the Joint Venture
are shown below in the corporate profile.
The business environment for plasticizers in recent years has been severer and
severer, with stagnated domestic demand due to the prolonged recession in Japan,
and price rivalry by excessive competition in both domestic and foreign markets.
It is beyond an individual company's efforts to cope with this tough situation.
Both parent companies has concluded that drastic rationalization through the consolidation
of their plasticizers business is the only way to allow them to strengthen the
business.
Corporate Profile of the Joint Venture
| 1. Company name |
To be determined. |
| 2. Scope of business |
Production and sales of plasticizers |
| 3. Representative directors |
To be determined. |
| 4. Contributed capital |
 480 million |
| 5. Expected sales |
Approx. 22 billion |
| 6. Ownership |
Mitsubishi Chemical 50%
Kyowa Hakko 50% |
| 7. Directors |
Four (4) - two (2) from Mitsubishi, two (2) from Kyowa |
| 8. Employees |
Approx. 20 (sales and administrative personnel).
Manufacturing plants will be operated by both parent companies. |
| 9. Operational start-up |
January 1st, 2000 |
| 10. Head office |
To be determined. |
| 11. Sales place |
Tokyo, Osaka |
Appendix 1 - What is plasticizer?
Plasticizers are plastic additives that render vinyl chloride resins flexible
or easy to work. PVC processors use plasticizers for the production of construction
materials, cable covering, vinyl house, etc.
There are several kinds of plasticizers - Phthalates, Adipates, Trimellitates,
Benzoates, etc. The domestic demand for plasticizers in fiscal 1998 ended March
31, 1999 was approximately 440,000 metric tons, about 80 % of which are that for
phthalates. Out of those phthalates, about 220,000 metric tons of DOP were consumed.
Market share of both Mitsubishi and Kyowa in fiscal 1998 ended March 31, 1999
is estimated to be 24% -- 10% and 14%, respectively.
Appendix 2 - Production Capacity
Production capacity of both companies as of March 1999 is shown as follows:
(Unit: MT/Y)
| Plant Site |
Mitsubishi |
Kyowa |
| Mitsubishi Chemical at Kawasaki Plant of Kawasaki
Kasei Chemicals*1 |
83,000 |
0 |
| Kyowa Yuka*2 (Chiba) |
0 |
80,000 |
| Mitsubishi Chemical (Yokkaichi) |
3,000 |
0 |
| Kyowa Yuka*2 (Yokkaichi) |
0 |
104,000 |
| Total |
86,000 |
184,000 |
*1 -- Subsidiary of Mitsubishi Chemical
*2 -- Subsidiary of Kyowa Hakko
| For further information, please contact |
| Mitsubishi Chemical Corporation |
| Public Relations Department |
| Tel: [+81] 3-3283-6274 |
| Kyowa Hakko Kogyo Co., Ltd. |
| Public Relations Office |
| Tel: [+81] 3-3282-7220 |
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