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| October 4, 2001 |
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| Mitsubishi Chemical announces major steps to
spur growth and profitability |
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| Mitsubishi Chemical Corporation |
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(Tokyo) - Mitsubishi Chemical Corporation (Nikkei: 4010) today announced the following
measures to improve profits, reorganize Group businesses, and reinforce the Group
management structure in order to achieve sustainable growth for the Mitsubishi
Chemical Group.
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Reorganization of Group Business Structures
To spur future profitability and growth, the company has divided the Group's businesses
into three areas: Petrochemicals, Pharmaceuticals and related businesses, and
Specialty Chemicals and related businesses. |
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A. Petrochemicals
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1. |
Current Business Situation
The petrochemicals business has been adversely affected by the current severe
business environment. As petrochemicals represent the largest Group business in
terms of assets and workforce, urgent measures will be taken to strengthen the
competitiveness of this unit.
We predict that the business environment will become more severe as there is no
anticipated relief such as an increase in domestic demand. Therefore, we anticipate
that the production volume of ethylene in Japan will substantially decrease. |
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2. |
Ethylene Center (olefin & aromatics)
Basic materials for petrochemical production, such as ethylene, propylene and
benzene, will not be affected by the measures by self-help under the situation
described above. Mitsubishi Chemical Corporation ("MCC") therefore will
seek to reinforce the competitiveness of this business in a flexible and aggressive
way by seeking cooperative efforts with potential partners both in Japan and globally,
including separation of business. |
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3. |
Petrochemical Derivatives
From the view of advantage in technology and market position, etc., MCC will select
those derivative businesses that are most competitive globally and which support
the development of other businesses, such as specialty chemicals and functional
materials. At the same time, MCC will seek measures to strengthen its competitiveness
and improve profitability of derivatives businesses including cooperative efforts
with potential partners. |
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B. Pharmaceuticals and Related Businesses
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1. |
Positioning
Pharmaceuticals and related businesses remain an important pillar of the Group,
and MCC will firmly maintain its current strategy to achieve both growth and profitability
in this sector. |
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2. |
Mitsubishi Pharma Corporation
On October 1, 2001, Mitsubishi Pharma Corporation was created by the merger of
Welfide Corporation and Mitsubishi-Tokyo Pharmaceuticals, Inc, with the goal of
becoming a major international company in the development of new pharmaceutical
products. The Group will focus its efforts on research and development, as well
as aggressive marketing of Mitsubishi Pharma Corp. products globally.
Based on the model of the successful launch of "Radicut," a neuroprotective
drug, in June of this year, the company will expand efforts in Japan and abroad
to focus on new fields of medicine including the nervous system, circulatory system,
immunology and allergy, and plasma protein. Major projects currently in development
include:
- Albrec (hypoproteinemia)
- TY720 (immunosuppressant)
- MCI-242 (treatment for depression and anxiety)
- MCC-555 (treatment for NIDDM) |
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3. |
Mitsubishi Kagaku Institute of Life Sciences
Mitsubishi Kagaku Institute of Life Sciences celebrated its 30th anniversary this
year. While the Institute will continue to conduct basic research, a translational
Research Department was added in April of this year in which MCC researchers participate
in the Institute's work. Through the activity of this new department, the company
will build upon 30 years of achievement at the Institute to develop and commercialize
practical technologies. |
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4. |
New Business Development
Mitsubishi Chemical Group will develop new businesses in the field of human healthcare
based upon its competitive biotechnology research achievements and intellectual
property. Particularly promising are the prospects for new drug development utilizing
advances in understanding of the human genome. In this area, Mitsubishi Chemical
Group is in the final stages of reaching an agreement with Fujitsu Limited to
cooperatively develop new products in the area of bio informatics. |
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5. |
Research and Technology Developments
Mitsubishi Chemical Group recognizes that future growth will depend on translating
research and technology advances into commercial products. Therefore, the Group
will develop the businesses of its companies such as Mitsubishi Pharma (pharmaceuticals),
Mitsubishi Kagaku Bio-Clinical Laboratories, Inc. (clinical testing technology),
Mitsubishi Kagaku Medical, Inc. (diagnostic equipment), and Mitsubishi Chemical
Safety Institute Ltd. (pre-clinical testing technology). In addition, the Group
will develop new alliances with outside companies such as Japan Genome Solutions
Inc. and license Group business technologies. |
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C. Specialty Chemicals, Functional Materials and Plastic-Based
Products, Carbon and Agrochemicals, Information and Electronics-Related Products
businesses
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1. |
Designed Specialty Chemicals
The group will shift emphasis from traditional product-oriented businesses (sales
of pre-specified products) to so-called solution-type businesses in which products
are developed specifically to match customers' needs and requests.
Based on the Group's strong integrated technology capabilities, it will provide
customers with designed specialty chemicals and designed specialty polymers, and
products that are specifically designed with functions that customers require.
Based on this strategy, the Group will proceed with selection and concentration
of these businesses and reorganize them from the viewpoints of their capability
for providing solutions, the growth potential of marketing, and their competitiveness.
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Development of New Businesses
With the goal of developing new businesses and products from the research and
development stage, the Group will continue with selection of appropriate research
themes and commercialization. The Group will also aggressively proceed with joint
research. In addition to joint projects already underway, including the fullerene
business in development with Mitsubishi Corporation, the Group is conducting joint
research activity with the University of California at Santa Barbara in the fields
of advanced functional materials, and solid lighting and displays.
Examples include:
- New design of advanced optoelectronics materials and devices
- Organic semiconductors, EL (electroluminescence), LEDs, TFTs, laser, and materials
for optical communications
- Bio materials and bio sensors
- Nano technology
- High-level precision production technology in nano level
- III/V compound semiconductors |
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3. |
Establishment of Technical Advisory Board
The Group established a Technical Advisory Board at the beginning of this year
to provide appropriate evaluation and advice on research and technology developments
in advanced fields from leading third-party experts.
Overseas researchers with expertise in surface nano technology, high-tech production
technology, designed specialty chemicals and other fields have been invited to
become members of the board have begun to participate in its activities. |
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| II. |
New Consolidated Group Management
Based on the above review of the positioning and direction of business sectors
and to strengthen Group management, the businesses of MCC and its Group companies
with common missions and operating standards will be reorganized into the following
five segments:
(Provisional name)
- Petrochemicals
- Health Care
- Carbon and Specialty Chemicals
- Functional Materials and Plastic-Based Products
- Corporate and Services
The positioning of each sector as one management unit with an executive manager
will substantially delegate authority and accelerate the pace of business development.
Resource allocation, investment strategy and other areas will be integrated and
coordinated, and all the sectors will benefit from unified R&td and marketing. |
| III. |
Immediate Measures to Improve Profits
With the goal of restoring dividends in the next business term, the Group will
introduce the following measures:
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1. |
Reduction of Remuneration for Executives
Remuneration for executives will be reduced up to 20% from October 2001. |
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2. |
Reduction of Fixed Costs
Fixed costs have already reduced by 10% from the previous term, however, MCC will
thoroughly review and cut costs such as head office and production costs, etc. |
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3. |
Restraint in Capital Investment
Although MCC has already reduced capital investment within depreciation in accordance
with the medium-term plan, it will be restrained more strictly except for the
minimum investment necessary for rationalization, reduction of costs, costs for
environments & safety and essential steps for future progress. |
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4. |
Efficient Use of R&D Expenditures
In effecting integration of management and business strategies of the Group, the
selection and concentration of research fields will be further enhanced. While
further efficiencies will be sought in R&D expenditures as a whole, there
will be special emphasis on accelerating the development of R&D achievements. |
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5. |
Disposal of Business
The Group will accelerate the disposal unprofitable businesses. With regard to
profitable businesses in which it is decided not to invest further resources these
will be converted into capital funds through stock listing and sales. |
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6. |
Restraint in Labor Costs
All measures to restrain labor costs will be taken such as an adequate number
of necessary employees in response to the business structural reforms, measures
undertaken to improve productivity by means of organizational reform, business
reform and promotion of efficiency for the Group as a whole. |
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MCC is currently studying all the aforementioned measures to improve profits and
will implement them speedily and energetically. And with from these measures,
MCC will reduce its costs by Yen 20 billion by the end of fiscal year 2002.
| For further information, please contact |
| Public Relations Dept., |
| Mitsubishi Chemical Corporation |
| Tel: [+81] 3-3283-6254 |
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