Mitsui Chemicals

Mitsui Chemicals Takes Over Petrochemical Affiliate

January 31, 2000
Mitsui Chemicals, Inc.

Japan's leading chemicals manufacturer Mitsui Chemicals, Inc. (MCI) will fully take over its joint venture ethylene center Osaka Petrochemical Industries, Ltd., MCI announced today. Take-over is expected on March 13 this year.

MCI and Osaka Petrochemical today concluded a stock exchange agreement under which Osaka Petrochemical would become MCI's fully owned subsidiary.

Since 1997, MCI has been operating two ethylene centers in Japan, namely, Osaka Petrochemical in the Osaka area, and Ukishima Petrochemicals Co., Ltd., a 50-50 joint venture with Nippon Petrochemical Co., Ltd., located in the Ichihara area near Tokyo.

The event today resulted from MCI's in-depth study into the subject of strengthening the global competitiveness of the ethylene centers providing MCI with the principal raw material ethylene, given the severe business environment prevailing in the petrochemical industry today. MCI had concluded that fully taking over Osaka Petrochemical and placing it under integrated management and operation together with Ukishima Petrochemicals would be the optimal course of action.

By taking over Osaka Petrochemical, MCI looks forward to speeding up management decision-making in a suitable and timely manner, while at the same time further improving the competitive strength of the Osaka ethylene center, so that the center would continue to make its contribution to the business development of its current shareholders who will continue to offtake ethylene.

With a capital of 5 billion yen,
Osaka Petrochemical is currently owned 55% by MCI,
20% by Ube Industries, Ltd.,
5% by Kaneka Corporation,
5% by Cosmo Oil Co., Ltd.
and the rest by Mitsui & Co., Ltd.,
Sanwa Bank and The Sakura Bank, Ltd.
Its ethylene production capacity stands at 450,000 tons per year, while it recorded annual sales of 47.7 billion yen for Fiscal 1998.

Contact:

Mitsui Chemicals, Inc.
Corporate Communications Office,
Mr.Kaneko
Tel 03-3592-4060 Fax 03-3592-4211