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| April 15, 2002 |
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| Domestic Terephthalic Acid Business To Be Reorganized |
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Mitsubishi Chemical Corporation
Mitsubishi Gas Chemical Company, Inc. |
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Mitsubishi Chemical Corporation (Head Office: Chiyoda-ku, Tokyo; President: Kanji Shono) and Mitsubishi Gas Chemical Company, Inc. (Head Office: Chiyoda-ku, Tokyo; President: Hideki Odaka) have agreed in principle to integrate their domestic terephthalic acid businesses, a move that will reduce costs and improve competitiveness.
Upon approval by the Fair Trade Commission, the two companies plan to establish the new business structure by October this year.
Over 90% of the terephthalic acid sold by the new joint venture sales company will be for the domestic market. The polyester chain of Mitsubishi Chemical Group companies will consume most of the planned production, thus ensuring a stable market.
The integration also will reduce production costs, thereby reinforcing the competitiveness of the terephthalic acid business.
The steps in the planned integration are as follows:
| 1. |
Termination of the purified terephthalic acid (PTA) production facility at Mitsubishi Chemical's Matsuyama Plant:
The PTA production facility with annual production capacity of 140,000 tons will be shut down at the end of September 2002. Afterwards, the total annual production capacity of terephthalic acid at the plant will be 250,000 tons (qualified terephthalic acid: QTA). |
- l PTA and QTA differ in production methods and although they are equal terephthalic acid, PTA is primarily used for non-fiber use while QTA is primarily used for fiber use.
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| 2. |
Establishment of a joint venture sales company:
Mitsubishi Chemical and Mitsubishi Gas Chemical will establish a joint venture sales company, which will assume the business rights of the two companies. The new company will aim at starting its operations in October 2002. |
| 3. |
Integration of production departments:
Mitsubishi Chemical and Mizushima Aroma Co., Ltd (50-50 joint venture between Mitsubishi Gas Chemical and Toyobo Co., Ltd.) will discuss possible integration of their domestic terephthalic production facilities. |
<Outline of New Joint Venture Sales Company>
| (1) Company name |
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Not yet determined |
| (2) Capital |
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About Yen 500 million (plan) |
| (3) Annual sales |
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About Yen 30 billion (expected) |
| (4) Sales volume |
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About 400,000 tons |
| (5) Equity share |
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Mitsubishi Chemical: 65%, Mitsubishi Gas Chemical: 35% (planned) |
| (6) President |
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Not yet determined (to be delegated from Mitsubishi Chemical) |
| (7) Start of operation |
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October 2002 |
| (8) Head office location |
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Not yet determined |
| (9) Operation bases |
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Tokyo, Osaka |
| For further information, please contact |
| Public Relations and Investor Relations Dept., |
| Mitsubishi Chemical Corporation |
| Tel: [+81]-(0)3-3283-6254 |
| Public & Investor Relations Div., |
| Mitsubishi Gas Chemical Company, Inc. |
| Tel: [+81]-(0)3-3283-5041 |
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