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| April 10, 2006 |
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Expansion of PC Capacity at the Kurosaki Plant
and Conduct of a Feasibility Study with Sinopec for a PC/BPA Joint Venture |
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| Mitsubishi Chemical Corporation |
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Mitsubishi Chemical Corporation ("MCC") (Head Office: Minato-ku, Tokyo; President: Ryuichi Tomizawa) announced today that it has finalized plans to expand its Polycarbonate resin ("PC") production at its Kurosaki Plant by constructing a new 60 kt/year capacity plant. Capacity of Diphenylcarbonate ("DPC"), an intermediate raw material of PC, will also be increased by 100 kt/year. These new plants are expected to finish construction by the end of March 2008. At the same time, MCC also made an announcement that it has entered into a letter of intent with China Petroleum & Chemical Corporation ("Sinopec"), a publicly listed company within the China Petrochemical Corporation Group, in which they basically agreed to conduct a feasibility study for establishing a PC and Bisphenol A ("BPA") joint venture in Beijing, the People's Republic of China, at the end of December 2005. Production at this joint venture is also planned to start by the end of year 2008.
These decisions by MCC are based on its strategy to correspond to the worldwide growth of PC demand.
PC is recognized as a representative engineering plastic with superior transparency and outstanding resistance to impact, heat, and weather. Because of these beneficial characteristics, PC is mainly used in areas such as optical recording media, electronics, cameras, cellular phones, office automation equipment, medical devices, automobiles, and as an alternative to glass at construction sites. Currently, the global demand for PC is estimated to be approximately 2,600 kt/year, and this figure is expected to continue growing at an annual rate of 7 to 8 percent.
MCC has selected Kurosaki as the location for this PC expansion from mainly two reasons; the estimated growths in PC demand in the local area and the ease of access to the Asian market. Also, in order to further increase the competitiveness of its PC business, MCC will shutdown one of its two existing PC production lines at the same time with this expansion. Therefore, after this plan, MCC will have two lines of PC production with a total capacity of 80 kt/year (this figure includes the existing capacity of 20 kt/year). For this expansion, MCC will introduce its latest technology that will realize both world-class cost competitiveness and environmentally-friendliness. All of the products from this expansion will be marketed through Mitsubishi Engineering Plastics Corporation ("MEP").
China, on the other hand, is evolving as the largest PC demand center in the world with an annual growth rate of more than 10 percent. In order to capture this active demand, Sinopec, the largest state-owned corporation in China with fully developed infrastructures, and MCC have been jointly searching the possibility of establishing a partnership in both PC and BPA. As a result of this preliminary joint study, Sinopec and MCC have agreed to progress further into conducting a detail feasibility study, based on the concept of establishing an equal Sino-foreign joint venture.
The MCC Group has positioned the product chain, Phenol-BPA-PC, as one of its strategic core businesses and is working together with MEP to become the leader in the growing Asian market. With this expansion and partnership with Sinopec, MCC will further cultivate its current operating base while demonstrating its commitment to become the world's most competitive PC producer by utilizing its resources and capabilities.
[Summary]
| (1) |
Expansion of PC capacity at the Kurosaki Plant |
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1. Location: |
Yahatanishi-ku, Kitakyushu-shi |
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2. Capacity: |
PC Resins: 60 kt/year
DPC: 100 kt/year |
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3. Scheduled completion date: |
March 2008 |
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4. Total investment amount: |
Approximately JP Yen 25 billion |
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5. Type of investment: |
Sole investment by MCC |
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| (2) |
China (Beijing) PC/BPA Project |
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1. Location: |
Fangshan District, Beijing
(on Sinopec Corp. Beijing Yanshan Company's premises) |
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2. Capacity: |
PC Resins: 60 kt/year
BPA: 100 kt/year |
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3. Scheduled completion date: |
December 2008 |
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4. Total investment amount: |
Approximately US$190 million |
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5. Type of investment: |
A Sino-foreign equity joint venture between a Japanese holding company to be formed by MCC and Mitsubishi Engineering-Plastics Corp. and Sinopec |
<Reference>
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Mitsubishi Engineering-Plastics Corporation
Head Office: Tokyo
President: Yuuichi Nakamura
Capital: JP Yen 3 billion
(A joint venture which Mitsubishi Gas Chemical Corporation and MCC own an equal 50% shares)
Revenue: Approximately JP Yen 135 billion (Estimated figures for 2005) |
| For further information, please contact |
| Public Relations and Investor Relations Dept., |
| Mitsubishi Chemical Corporation |
| Tel: [+81]-(0)3-6414-3730 |
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