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| May 21, 2003 |
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| New Organization to Operate Polyolefin Business |
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| Mitsubishi Chemical Corporation |
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Mitsubishi Chemical Corporation (Head Office: Chiyoda-ku, Tokyo; President: Ryuichi Tomizawa) had reached to a basic agreement with Tonen Chemical Corporation (Head Office: Minato-ku, Tokyo; President: Yasuo Kudo) for the former to purchase the latter's shares in Japan Polychem Corporation (Head Office: Chiyoda-ku, Tokyo; President: Etsujiro Kouge), a joint venture company in polyolefin business between the two, and make Japan Polychem as Mitsubishi Chemical's wholly-owned subsidiary. The two companies have concluded the final agreement today to execute the deal as on June 2 this year.
Meanwhile, concerning the polyethylene business, Japan Polychem has reached to a basic agreement today with Japan Polyolefins Co., Ltd. and Mitsubishi Shoji Plastics Corporation to establish a joint venture company as from September 1 this year. As to the polypropylene business, Japan Polychem has reached to a final agreement today with Chisso Corporation to start a joint venture company as from October 1 this year. After these two joint venture companies have started their operations, Japan Polychem will be responsible for a part of their common operations and, at the same time, have a function to coordinate the both businesses. Through efficient business operations, Japan Polychem will reinforce the competitiveness of these two businesses.
In petrochemical business which occupies a key position in Mitsubishi Chemical Group, Mitsubishi Chemical has recognized the competitiveness of olefin and its major derivative, polyolefin, as an extremely important part of the overall petrochemical business, and the Company will promote alliances and make investment necessary to enhance their competitiveness. Making Japan Polychem as a wholly-owned subsidiary and establishing two new joint venture companies are consistent with Mitsubishi Chemical's strategy. By continuing to implement necessary measures speedily in the future, Mitsubishi Chemical will respond swiftly and effectively to various changes of the environment including further price reduction of imported products as a result of the scheduled stepwise tariff reduction in 2004, and will strengthen the competitiveness of its petrochemical business as a whole covering from olefin centers to petrochemical derivatives.
| For further information, please contact |
| Administration Dept. |
| Japan Polychem Corporation |
| Tel: [+81]-(0)3-3287-8010 |
| Administration Dept. |
| Japan Polyolefins Co., Ltd. |
| Tel: [+81]-(0)3-3595-4711 |
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<Outline of A New Polyethylene Company (plan)>
| Company name: |
Japan Polyethylene Corporation |
| President: |
Etsujiro Kouge |
| Start of business: |
September 1, 2003 |
| Paid-in capital: |
Yen 7.5 billion |
| Annual turnover: |
Yen 110 billion |
| Shareholders: |
Japan Polychem Corporation-50%
Japan Polyolefins Co., Ltd. - 42%
Mitsubishi Shoji Plastics Corporation-8% |
| Line of business: |
Manufacturing, sales and R&D of polyethylene resins |
| Employee force: |
About 700 |
| Production capacity: |
| LDPE |
417.4 thousand tons/year |
| L-LDPE |
374.7 thousand tons/year |
| HDPE |
475.6 thousand tons/year |
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| Sales office: |
Tokyo and Osaka |
<Outline of Parent Companies>
Japan Polychem Corporation
| Established: |
September 1, 1996 |
| Paid-in capital: |
Yen 20 billion |
| Annual turnover: |
About Yen 135 billion |
| Total assets: |
About Yen 110 billion |
| Employee force: |
About 830 |
| Shareholders: |
Mitsubishi Chemical Corporation- 65%
Tonen Chemical Corporation - 35%
(To be wholly owned by Mitsubishi Chemical as from June 2, 2003) |
| President: |
Etsujiro Kouge |
Japan Polyolefins Co., Ltd.
| Established: |
October 1, 1995 |
| Paid-in capital: |
Yen 6.5 billion |
| Annual turnover: |
About Yen 56 billion |
| Total assets: |
About Yen 54 billion |
| Employee force: |
About 430 |
| Shareholders: |
Showa Denko K.K. - 65%
Nippon Petrochemicals Co., Ltd. - 35% |
| President: |
Koh Matsushita |
Mitsubishi Shoji Plastics Corporation
| Established: |
April 1, 1990 |
| Paid-in capital: |
Yen 510 million |
| Annual turnover: |
About Yen 80 billion |
| Total assets: |
About Yen 35 billion |
| Employee force: |
About 130 |
| Shareholders: |
Mitsubishi Corporation - 100% |
| Line of business: |
Sales in Japan and trading of plastics-related products, recycling of plastics, rental of plastics-related equipment and materials, and data processing |
| President: |
Kazumasa Furukawa |
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<Details of Polyethylene Business of Concerned Companies>
| *1: |
Japan Polyolefins Corp. was established by integrating PE and PP businesses of Showa Denko K.K. and Nippon Petrochemicals Co., Ltd.
(Shareholders: Showa Denko K.K.-65%, Nippon Petrochemicals Co., Ltd.-35%)
(Japan Polyolefins Co., Ltd. integrated its PP business with Basell Group [former Montell Group] and separated the business
as Sun Allomer Ltd. [former Montell SDK Sunrise]) |
| *2: |
Japan Polychem Corp. was established by integrating sales departments of Mitsubishi Chemical Corp. and Tonen Chemical Corp.
(Shareholders: Mitsubishi Chemical Corp.-50%, Tonen Chemical Corp.-50%) |
| *3: |
Japan Polychem Corp. acquired PE and PP manufacturing departments of Mitsubishi Chemical Corp. and Tonen Chemical Corp.
(Shareholders: Mitsubishi Chemical Corp.-65%, Tonen Chemical Corp.-35%) |
| *4: |
Mitsubishi Chemical Corp. will acquire the shares of Tonen Chemical Corp. in Japan Polychem Corp. (Plan) |
| *5: |
Japan Polychem Corp. and Japan Polyolefins Corp. will integrate their PE business and establish Japan Polyethylene Corp. (Plan)
Mitsubishi Shoji Plastics Corp. will acquire 8% of the shares of Japan Polyehtylene Corp. (Plan) |
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| Reorganization of Polypropylene Business |
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Japan Polychem Corporation (Head Office: Chiyoda-ku, Tokyo; President: Etsujiro Kouge) and Chisso Corporation (Head Office: Chuo-ku, Tokyo; President: Shunkichi Goto) have today concluded a final agreement to establish a new company in polypropylene (PP) business as from October 1 this year. The two companies had reached to a basic agreement to integrate their PP businesses and establish a new company in June 2001.
Japan Polychem has production facilities with a total capacity of 673 thousand tons/year of PP resins at its plants in Kashima, Kawasaki, and Mizushima, and is engaged in production and sales of PP resins and compounds. Chisso has production facilities of the total capacity of 401 thousand tons/year of PP resins at Goi plant of Chisso Petrochemical Corporation: 100%-owned subsidiary of Chisso and at its subsidiary: Yokkaichi Polypro., Ltd., and conducts production and sales of PP resins and compounds.
Both companies have strived for strengthening their PP businesses with improvement of efficiency and cost reductions on their own. However, PP business in Japan has currently been in a severe situation with hikes in the raw materials price, and stagnant domestic market conditions and demand due to inflow of overseas products and shift of manufacturing to overseas countries. Moreover, it is anticipated that the environment will become further difficult due to scheduled tariff reduction in 2004, the establishment of supergiant PP manufacturers abroad and start of new large-sized facilities in Asia and the Middle East. Therefore, it has become an urgent necessity for all domestic manufacturers to further reinforce their competitiveness to survive.
Under these circumstances, Japan Polychem and Chisso have come to a common recognition that thorough rationalization in every sector of production, sales, distribution, R&D and administration is indispensable, which cannot be achieved by either company on its own, in order to reinforce international competitiveness of PP business and enhance their international presence. Accordingly, both companies have concluded the agreement to integrate their PP businesses and establish the new company.
Japan Polychem and Chisso aim to develop the new company as a company having strong presence and producing higher value with higher efficiency, and to realize benefits of the integration in an early time.
| For further information, please contact |
| Administration Dept. |
| Japan Polychem Corporation |
| Tel: [+81]-(0)3-3287-8010 |
| General Affairs & Human Resources Dept. |
| Chisso Corporation |
| Tel: [+81]-(0)3-3534-8909 |
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<Outline of A New Polypropylene Company (plan)>
| Company name: |
Japan Polypropylene Corporation |
| President: |
Etsujiro Kouge |
| Start of business: |
October 1, 2003 |
| Paid-in capital: |
Yen 5 billion |
| Annual turnover: |
Yen 130 billion |
| Shareholders: |
Japan Polychem Corporation- 65%
Chisso Corporation- 35% |
| Line of business: |
Production, sales and R&D of polypropylene resins |
| Employee force: |
About 730 |
<Outline of Parent Companies>
Japan Polychem Corporation
| Established: |
September 1, 1996 |
| Paid-in capital: |
Yen 20 billion |
| Annual turnover: |
About Yen 135 billion |
| Total assets: |
About Yen 110 billion |
| Employee force: |
About 830 |
| Shareholders: |
Mitsubishi Chemical Corporation- 65%
Tonen Chemical Corporation - 35%
(To be wholly owned by Mitsubishi Chemical as from June 2, 2003) |
| President: |
Etsujiro Kouge |
Chisso Corporation
| Established: |
January 12, 1950 |
| Paid-in capital: |
Yen 7.8 billion |
| Annual turnover: |
About Yen 120 billion |
| Total assets: |
About Yen 86 billion |
| Employee force: |
About 930 |
| Shareholders: |
Mizuho Corporate Bank, Ltd. - 4.99% |
| President: |
Shunkichi Goto |
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<Details of Polypropylene Business of Concerned Companies>
| *1: |
Chisso Corp. acquired PP business from Tosoh Corp. |
| *2: |
Japan Polychem Corp. was established by integrating sales departments of Mitsubishi Chemical Corp. and Tonen Chemical Corp.
(Shareholders: Mitsubishi Chemical Corp.-50%, Tonen Chemical Corp.-50%) |
| *3: |
Japan Polychem Corp. acquired PE and PP manufacturing departments of Mitsubishi Chemical Corp. and Tonen Chemical Corp.
(Shareholders: Mitsubishi Chemical Corp.-65%, Tonen Chemical Corp.-35%) |
| *4: |
Mitsubishi Chemical Corp. will acquire the shares of Tonen Chemical Corp. in Japan Polychem Corp. (Plan) |
| *5: |
Japan Polychem Corp. and Chisso Corp. will integrate their PP business and establish Japan Polypropylene Corp. (Plan) |
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