| August 31th, 1999 |
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To Establish a Joint Venture for Plasticizers Business |
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Mitsubishi Chemical Corporation (President: Kanji Shono, headquartered in Chiyoda-Ku, Tokyo) and Kyowa Hakko Kogyo Co., Ltd. (President: Tadashi Hirata, headquartered in Chiyoda-Ku, Tokyo) announced today that both companies agreed to establish a joint venture company (hereinafter called "Joint Venture") for both production and sales of plasticizers, with the capital contributed equally by both companies. The Joint Venture is scheduled to start business on January 1st, 2000 after the parent companies transfer their domestic sales of plasticizers to the Joint Venture, so long as no questions arise in the course of deliberations by the Japan Fair Trade Commission. The basic configuration and operation of the Joint Venture are shown below in the corporate profile. The business environment for plasticizers in recent years has been severer and severer, with stagnated domestic demand due to the prolonged recession in Japan, and price rivalry by excessive competition in both domestic and foreign markets. It is beyond an individual company*s efforts to cope with this tough situation. Both parent companies has concluded that drastic rationalization through the consolidation of their plasticizers business is the only way to allow them to strengthen the business.
Corporate Profile of the Joint Venture
Appendix 1 - What is plasticizer? There are several kinds of plasticizers - Phthalates, Adipates, Trimellitates, Benzoates, etc. The domestic demand for plasticizers in fiscal 1998 ended March 31, 1999 was approximately 440,000 metric tons, about 80 % of which are that for phthalates. Out of those phthalates, about 220,000 metric tons of DOP were consumed. Market share of both Mitsubishi and Kyowa in fiscal 1998 ended March 31, 1999 is estimated to be 24% -- 10% and 14%, respectively.
Appendix 2 - Production Capacity
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