Press Releases

May 27, 1997
Asahi Chemical Industry Co., Ltd.

(Unit: Millions of Yen)

Financial Highlights

1. Corporate
For the Fiscal Year		1997		1996	1998 (Estimated)
	Net Sales	1,291,598	(6.7%)	1,210,170	1,350,000
	Operating Profit	72,102	(28.1%)	56,270
	Ordinary Profit	60,685	(27.5%)	47,604	62,000
	Net Income	25,353	(174.5%)	9,235	26,000
	Net Income per Share (yen)	17.57		6.40
	Cash Dividend per Share (yen)	6.00		6.00
At Fiscal Year End		1997		1996
	Total Assets	1,250,920		1,235,053
	Shareholders' Equity	442,730		425,947
	Net Income/ Shareholders' Equity	5.8%		2.2%
	Shareholders' Equity/ Total Assets	35.4%		34.5%
2. By Sector
Sales		1997		1996
	Chemicals and Plastics	363,589		354,595
	Housing and Construction Materials	451,406		392,030
	Fibers and Textiles	184,065		177,499
	Special Products and Services	292,538		286,046
Operating Profit (Loss)		1997		1996
	Chemicals and Plastics	13,031		20,659
	Housing and Construction Materials	29,086		18,113
	Fibers and Textiles	4,986		(2,512)
	Special Products and Services	25,075		20,064
	Combined	72,178		56,324
	Eliminations	(76)		(54)
	Consolidated	72,102		56,270

Summary of Consolidated Results for Fiscal 1996

Moderate recovery continued for the Japanese economy throughout 1996, led by growth in private-sector capital investment and housing.

At Asahi Chemical, the corporate focus on established and evolving core competencies and competitive strengths led the way to substantially improved consolidated-base results for the fiscal year ended March 1997. In chemicals and plastics, sales and particularly profit levels were depressed by generally slack market demand and sharply heightened raw material costs. In housing and construction materials, and in the special products and services sector led by electronics-related operations, strong performance brought substantial gains in sales and profits. In fibers and textiles, restructuring in commodity products and strong performance by functional products led the way to substantially improved performance.

The net result, for the consolidated-base operations of Asahi Chemical, was an 81,428 million yen increase in sales to 1,291,598 million yen, a 15,832 million yen increase in operating profit to 72,102 million yen, and a 13,081 million yen increase in ordinary profit to 60,685 million yen. Net income rose 16,118 million yen, to 25,353 million yen.



For the four main business sectors, performance was essentially as follows.


• Chemicals and Plastics. Sales increased 8,994 million yen from the previous year, to 363,589 million yen. Sales volumes were high, led by basic chemicals and polyethylene, but operating profits declined by 7,628 million yen to 13,031 million yen, in an operating environment marked by elevated raw material prices and slumping overseas markets.
  
• Housing & Construction Materials. Led by rising demand in housing and a recovery in the construction industry, sales volumes increased for both housing units and construction materials. Sales increased 59,376 million yen from the previous year, to 451,406 million yen, and operating profit rose by 10,968 million yen, to 29,081 million yen.
  
• Fibers & Textiles. Sales increased just 6,566 million yen from the previous year, to 184,065 million yen, but the operating profit of 4,986 million yen marked a movement of the fibers and textiles operation into the black, and an increase of 7,498 million yen from the negative level of the previous year. This was led by the pervasive restructuring of the commodity fiber operations, excellent performance in elastic polyurethane and other functional fibers, and solid progress by overseas subsidiaries.
  
• Special Products & Services. Operating profit rose by 5,011 million yen from the previous year to 25,075 million yen, on sales that increased by 6,492 million yen to 292,538 million yen, led by excellent performance in LSIs and electronics-related operations and in ion exchange membranes and electrolytic systems.



The moderate growth in the Japanese economy is expected to continue, but it is also marked by major uncertainties as it moves into a period of basic fiscal restructuring and continuing instabilities in the international currency exchange rates.

Asahi Chemical has begun the implementation of a strategic initiative for mid- and long-range growth. The WIN"G"21 initiative, begun in June 1996, anticipates the decade of pervasive restructuring in industries and economies, and sets the course for a fundamental shift and expansion into the high-growth sectors of health care, electronics, and housing related operations, into functional-material and end-product sectors, and into overseas operations and alliances. WIN"G"21 is a unified, corporate-wide initiative, involving every level and phase of operations in the effort for a corporate structure and operations characterized by high levels of international competitive strength and profitability. For the year ending 31 March 1998, the corporate effort is expected to bring consolidated-base results of 1,350,000 million yen in net sales, 62,000 million yen in ordinary profit, and 26,000 million yen in net income.