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| May 10, 2006 |
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| Strengthening the global rollout of the PP compound business for automobiles |
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| Mitsubishi Chemical Corporation |
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Mitsubishi Chemical Corporation (Head office: Minato-ku, Tokyo; President: Ryuichi Tomizawa, hereafter MCC) has signed a contract with ExxonMobil Chemical Company, the chemical division of Exxon Mobil Corporation (Head office: Texas: United States of America; CEO: Rex W. Tillerson, hereafter EMCC) to purchase, on June 1, EMCC's stake in two joint ventures currently owned by both companies. Under the agreement, the joint ventures (hereafter, the two MYTEX companies, refer to separate sheet) which manufacture and sell polypropylene (PP) compounds, will both become wholly owned subsidiaries of MCC.
Demand for PP is strong both inside and outside Japan, particularly as the market for PP compounds for automobiles, which use PP as a raw material, is continuing to grow globally at an annual rate of 6% due to increases in the number of automobiles manufactured and sold and an increase in the volume of resin used for each vehicle.
The MCC Group considers the PP business as one of its core business areas, and is currently conducting the business chiefly through Japan Polypropylene Corporation, (hereafter JPP), a joint venture with Chisso Petrochemical Corp. The MCC Group has a particularly strong reputation for high-grade products including materials for automobile use. In order to respond the increasingly global needs of customers in the automobile industry, the MCC Group has set up manufacturing and sales operations in Japan, North America, East Asia and China, establishing mechanisms for supplying products to customers' manufacturing operations in various regions throughout the world, and thereby has built trusting relationships. Furthermore, in recent years, customers increasingly demand the supply of materials of identical quality (global materials) no matter where they are in the world.
The MCC Group's move to wholly acquire the two MYTEX companies is a response to these needs, and will allow the MCC Group to improve the integration of the automobile PP compound business implemented by the two companies with the domestic PP business conducted principally by JPP.
Managing Executive Officer Hiroshi Yoshida, commenting on the acquisition agreement, said "This decision will allow the MCC Group to respond to the demands of our customers in the automobile industry for global materials, and will help raise the presence of the MCC Group in the globally expanding automobile resins market."
To strengthen the PP compound business, a stable global supply of high-quality PP material is essential. To secure such a supply, the MCC Group will continue to cooperate with EMCC in North America and East Asia in addition to leveraging JPP's high value-added PP process license. These policies will allow the MCC Group to establish mechanisms for the provision high-quality global materials to the automobile industry.
The MCC Group currently has the capacity right to off-take PP resins from EMCC's Singapore subsidiary and sells them to the durables market via Mytex Polymers Asia-Pacific (MYTEX-AP), MYTEX-AP will now concentrate on PP compound business for automobile use and the above capacity right of the MCC Group will be relinquished concurrent with the acquisition of the two MYTEX companies.
| For further information, please contact |
| Public Relations and Investor Relations Dept., |
| Mitsubishi Chemical Corporation |
| Tel: [+81]-(0)3-6414-3730 |
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<Japan Polypropylene Corporation>
| Head office: |
Minato-ku, Tokyo, Japan |
| President: |
Eiichi Murakami |
| Capital: |
5,000 million yen |
| Equity participation: |
Japan Polychem Corporation*: 65%
Chisso Petrochemical Corporation: 35%
*Wholly owned subsidiary of MCC |
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<Mytex Polymers General Partnership>
| Establishment: |
1987 |
| Location: |
Jeffersonville, Indiana, USA |
| Equity participation: |
Japan Polychem America, LLC: 50%
Mytex Polymers Inc.*: 50%
*Wholly owned subsidiary of EMCC |
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<Mytex Polymers Asia Pacific Private Limited>
| Establishment: |
2000 |
| Head office: |
Singapore |
| Equity participation: |
Mitsubishi Chemical Singapore Pte Ltd: 50%
ExxonMobil Chemical Asia Pacific*: 50%
*Wholly owned subsidiary of EMCC |
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