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| October 11, 2000 |
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| Mitsubishi Establishes Joint Venture in Acrylonitrile,
Acrylamide, Polyacrylamide, and Related Businesses |
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Mitsubishi Chemical Corporation
Mitsubishi Rayon Co., Ltd. |
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Tokyo-Mitsubishi Chemical Corporation (President: Kanji Shono)
and Mitsubishi Rayon Co., Ltd. (President: Yoshiyuki Sumeragi) announced today
that the two companies reached an agreement-in-principle to merge their respective
acrylonitrile (AN) businesses and its derivatives, acrylamide (AAM) and polyacrylamide-type
flocculants (polyacrylamide), and other related businesses. Subject to pre-merger
clearance from the Japan's Fair Trade Commission, the two companies will begin
a detailed study for launching a joint venture in April 2001.
Mitsubishi Chemical has been involved in the AN business since 1959, when it began
producing and distributing AN. AN development led to the manufacture and sales
of AAM and polyacrylamide, both of which are AN derivatives. Meanwhile, in 1998,
Mitsubishi Rayon merged with Nitto Chemical Industry and benefited from Nitto's
long-standing experience in AN and AAM development, dating back to 1957. In addition,
Diafloc Co., Ltd., a wholly-owned subsidiary of Mitsubishi Rayon, has long been
engaged in the production and distribution of polyacrylamide. Mitsubishi Rayon
has therefore developed truly integrated operations spanning monomers and polymers.
Accelerated competition in the globalized marketplace and added pressures for
cost reduction and rationalization in all AN-related businesses since the mid-1990s
have forced players to drastically restructure. Given this, Mitsubishi Chemical
and Mitsubishi Rayon reached an agreement-in-principle to merge their respective
AN-related businesses, confident that the integration of their mutual technological
expertise, production facilities, and distribution channels (among others) will
enable them to secure a competitive edge and further solidify their position in
the international marketplace.
Mitsubishi Chemical's strength lies in its integrated production system from raw
materials (propylene and ammonia) to polyacrylamide, backed by all-round technological
expertise. Mitsubishi Rayon derives its strength from its solid AN-related businesses
supported by downstream products such as acrylic resins and fibers, in addition
to in-house developed AAM production process, which employs the world's first
bio-catalytic process. We are confident that the structural and organic coordination
of the prominent features of the two companies will infuse broad-range synergy
into R&D, production and distribution.
Slated for launch in April 2001, the new company is envisioned as a joint venture
that integrates R&D, production and distribution. With such ambitions, we
expect our business merger to boost our competitive edge as we further consolidate
R&D and technical service capabilities and efficiently restructure production,
selling, and logistics.
[Tentative Outline for the New Company (to be confirmed)]
| 1 |
Company Name |
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yet to be decided |
| 2 |
President |
: |
to be appointed in rotation |
| 3 |
Start of Operations |
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April 1, 2001 |
| 4 |
Paid-in Capital |
: |
yet to be decided |
| 5 |
Capital Structure |
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Mitsubishi Chemical (50%) : Mitsubishi Rayon (50%) |
| 6 |
Business Outline |
: |
AN, AAM, polyacrylamide, N-vinylformamide and its polymers,
acetone cyanhydrine; and the production, selling and R&D of catalysts for
the manufacture of AN and AAM |
| 7 |
Forecasted Revenue |
: |
approximately 
30 billion |
| 8 |
No. of Employees |
: |
yet to be decided |
| For further information, please contact |
| Mitsubishi Chemical Corporation, |
| Office of Public Relations, |
| Tel: [+81] 3-3283-6254 |
| Mitsubishi Rayon Co., Ltd., |
| Office of Public and Investor Relations. |
| Tel: [+81] 3-5495-3100 |
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