September 2, 1999

Establishment of New Joint Venture for Vinyl Chloride Business

Toagosei Co., Ltd. and Mitsubishi Chemical Corporation reached basic agreement on the consolidation of vinyl chloride business and decided to start a new joint venture. Both companies will proceed with the studies of the details to be able to establish the new company starting April 2000, unless any special problems regarding the Antitrust Law exist.

Since May 1998, both companies have been swapping their vinyl chloride polymer utilizing their production sites in east and west part of Japan to rationalize the logistic cost as well as other joint efforts for the rationalization. However, the business environment of vinyl related products has been more stringent year by year and the profitability is not satisfactory due to the long time stagnancy of domestic demand and keen international competition.

Under such circumstances, both companies agreed that it is indispensable to fully consolidate the business by the establishment of joint production and sales company for strengthening sales, R&D and technical service activities and to restructure production system for the cost reduction. The gist of the agreement is as follows:

1.Name of the new company: To be decided later
2.President: Will be sent from Mitsubishi Chemical Corporation
3.Start-up date: April l, 2000 (planned)
4.Capital: Not yet decided
5.Capital share: Mitsubishi Chemical 60%
Toagosei 40% (planned)
6.Contents of the business: Production, sales and R&D of electrolytic products, vinyl chloride monomer (VCM),vinyl chloride polymer (PVC)
7.Sales: ¥30 billion/year (estimate)
8.Number of employees: about 180 (estimate)

Existing plant capacity as of the end of April 1999 is as follows:

PVC Mitsubishi Chemical
Mizushima 100,000t/y
Yokkaichi 127,000
[8,000 will be stopped in March,2000] 		Toagosei
Kawasaki Organic Chemical 203,000 t/y
VCM Mizushima 300,000
(Kashima Vinyl Chloride Monomer 600,000)		 (Central Chemical 130,000)
Electrolysis(as NaOH) Mizushima 116,000
Kurosaki 35,000
(Kashima Chloride&Alkali 354,000)		 Tokushima 166,000
Nagoya 73,000
(Central Chemical 67,000)

All plants underlined will be transferred to the new joint venture.

Contact to Administration Dept., Toagosei Co. Ltd. (Tel. 03-3597-7214 in Japan, or 81-3-3597-7214 from overseas)