Asahi Chemical and Mitsubishi Chemical have
reached basic agreement on the establishment of a new joint
venture company for the restructuring, consolidation, and
merger of their polystyrene operations.
Asahi Chemical and Mitsubishi Chemical will
proceed with planning and implementation which is expected
to lead to the initiation of operations by the new joint venture
in October of this year, so long as no questions arise in
the course of deliberations by the Japan Fair Trade Commission
concerning anti-trust law and related matters. In concert
with their agreement and progress in relation to polystyrene,
Asahi Chemical and Mitsubishi Chemical will also proceed with
mutual study and discussion of a similar restructuring, consolidation,
and merger of their styrene monomer operations.
The business environment for polystyrene
in recent years has been one of constantly increasing severity,
with long-term stagnation in domestic demand, transfer by
user industries to overseas manufacturing sites, and intensifying
competition from foreign polystyrene manufacturers. The agreement
by Asahi Chemical and Mitsubishi Chemical is based on a shared
perception of the essential need to build a stronger operating
base and increased international competitive strength, in
order to permit the maintenance, continuing development, and
future growth of the polystyrene business, through intensive
integration and consolidation of their polystyrene operations.
In brief corporate profile, the joint venture
is scheduled to take the following configuration.
Corporate Profile of New Joint Venture
- Scope of business:
Production and sale of polystyrene, and
related R&D. As currently planned, operation will begin
with domestic marketing and sale of polystyrene, to be
expanded within approximately one year to fully integrated
polystyrene operations by the transfer and initiation
of related polystyrene production and R&D capabilities
from the parent companies.
- Expected establishment:
October 1998
- Expected operational start-up:
October 1998
- Estimated sales:
Approx. 50,000 million yen/year
- President:
To be assigned from Asahi Chemical
- Employees:
To be assigned from both parent companies;
number as yet undetermined
- Shareholders:
50%, Asahi Chemical
50%, Mitsubishi Chemical
The name, head office location, and capitalization
of the new joint venture have not yet been determined. The
production capacity is scheduled to be 543,000 tons/year of
polystyrene, as the combined total production capacity of
the parent companies as of December 1997.
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