Mitsubishi Rayon Co., Ltd. (Head office: Chiyoda-ku, Tokyo; President: Hitoshi Ochi, hereinafter “MRC”) and Daicel Corporation (Head office: Kita-ku, Osaka; President: Misao Fudaba, hereinafter “Daicel”) concluded a contract in August 2012 to establish a joint venture for the production of acetate tow for cigarette filters. On this occasion, MRC and Daicel announce the establishment of the acetate tow production company, Toyama Filter Tow Co., Ltd. (hereinafter “Toyama Filter Tow”), as a joint venture of both companies on May 1, 2013, following the completion of business combination reviews by relevant agencies in accordance with individual countries’ antimonopoly laws . Toyama Filter Tow was established through a spin off by MRC in October 2012.   

1. Background to the establishment of joint venture company
Cigarette demand is growing globally, particularly in emerging nations in Asia, Africa and Eastern Europe.  To serve this expanding market, MRC and Daicel aim to set up an internationally competitive production system, through the joint venture company to be established for the manufacture of acetate tow for cigarette filters.
MRC aims, through its stronger co-operative relationship with Daicel in the manufacture of acetate tow, to develop solid base for its business portfolio and also enhance its acetate filament business by boosting earnings through expansion of the market for acetate textile, an environment-friendly textile ideal for fashionable apparel items.
 
For Daicel, acetate tow for cigarette filters is one of its core businesses. Given the growing demand, Daicel has promoted its acetate tow business in accordance with its “3D-I” medium-term plan.  Establishment of this joint venture is a part of that initiative.
Daicel undertakes to upgrade and expand the acetate tow production facilities at the current business site in preparation for the commencement of commercial operations in July 2013, and in addition, to increase production of acetate tow at its joint venture company in China.

2.  Outline of the Joint Venture
(1)MRC has transferred 35% of Toyama Filter Tow’s outstanding shares to Daicel, with MRC holding a 65% interest and Daicel holding the remaining 35%.
(2)Toyama Filter Tow supply its output to both MRC and Daicel, and both companies continue their independent sales activities.
(3)Daicel supply raw material (cellulose acetate flakes) for the operation of Toyama Filter Tow.
 
3.  Outline of Toyama Filter Tow Co., Ltd.
(1)Head office & production plant: Toyama City, Toyama Prefecture, Japan
(2)Establishment: October 1, 2012 (by means of a MRC spin-off)
(3)Paid-in capital: \50 million (MRC: 65%; Daicel: 35%)
(4) Employees: approximately 100
(5)Representative: Yoshiki Sakurai
(6)Line of business: production of acetate tow for use in cigarette filters