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| April 10, 2008 |
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Discontinuation of the Export of Polyvinyl Chloride
and Resulting Revision to Production System |
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| V-Tech Corporation |
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V-Tech Corporation ("V-Tech"; Head office: Minato-ku, Tokyo; President: Yoshio Kawasaki) has decided to discontinue its export of polyvinyl chloride (PVC), excluding supply to affiliated companies, to concentrate on supplying to domestic customers and to quickly change its production and shipping system at the end of May 2008. V-Tech is therefore aiming to transform its business structure into a more robust one while capitalizing on the advantages of integrated production of electrolyzed products, vinyl chloride monomer (VCM), and PVC.
Details concerning the background and specific actions are as follows:
1. Background
| (1) |
To make up for the decline in domestic demand, V-Tech has actively increased
exports, not only to China but to Turkey, Egypt and other emerging countries
since the second half of last year. However, despite a steady price increase
on a U.S. dollar basis, there has been no improvement in profitability due to
soaring freight costs, other expenses, and strong yen. It is therefore considered
uncertain to continue such export in the future. |
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| (2) |
The ongoing upward trend in the prices of naphtha, heavy oil and coal will
unavoidably continue in the future and the price of industrial salt is also very
likely to increase sharply from April 2008 onwards, although it has hitherto
been relatively stable. The upward pressure on PVC costs is expected to intensify. |
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| (3) |
To adapt to such massive structural changes in demand and in cost and to
sustain its business in a stable manner, V-Tech has decided to immediately implement
drastic measures, including the partial suspension of plant operations. |
2. Specific actions
| (1) |
At present, V-Tech has a total PVC production capacity of 304,000 tons per
year at its three plants at Yokkaichi, Kawasaki and Mizushima. The Yokkaichi
Plant and Kawakaki Plant serve mainly to meet domestic demand while the Mizushima
Plant engages mainly in export. Discontinuing the PVC production facility at
the Mizushima Plant at the end of May 2008, V-Tech will immediately move towards
a system with production in two plants at Yokkaichi and Kawasaki to concentrate
on domestic sales. |
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| (2) |
After the suspension at the Mizushima Plant, V-Tech's PVC production capacity
will be 220,000 tons per year. This figure takes into account the partial revision
and expansion at the Kawasaki Plant on the occasion of the regular turnaround
in July 2008. |
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| (3) |
In accordance with the new production system, the electrolyzed production
at the Mizushima Plant and VCM production will be subject to minor production
adjustment. |
| For further information, please contact |
Public Relations and Investor Relations Department
Mitsubishi Chemical Corporation |
| Tel: +81-(0)3-6414-3730 |
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Company profile
| (1) Company name: |
V-Tech Corporation |
| (2) Establishment: |
April 1, 2000 |
| (3) President: |
Yoshio Kawasaki |
| (4) Head office: |
Minato-ku, Tokyo |
| (5) Capital: |
6 billion yen |
| (6) Net sales: |
41.8 billion yen (in the fiscal year ended December 2007) |
| (7) Equity participant: |
Mitsubishi Chemical Corporation: 85.1%
Toagosei Co., Ltd.: 14.9% |
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