Mitsui Chemicals and Sumitomo Bakelite in Adhesives Joint Venture

December 14, 1999
Mitsui Chemicals, Inc.
Sumitomo Bakelite Co., Ltd.

Japanese chemical makers Mitsui Chemicals, Inc. (MCI) and Sumitomo Bakelite Co., Ltd. (SBC) will newly establish next April a joint venture company integrating their wood adhesives businesses, the two companies announced (today).

The yet unnamed joint venture company will be capitalized at 700 million yen, with MCI contributing 60% and SBC 40%.

Designed to engage in the manufacture, sales and R&D of wood adhesives, the JV will have a total production capacity of 122,000 tons per year of urea, phenolic and melamine adhesives, and is expected to record sales of about 5 billion yen in the initial fiscal year. The starting date of company operation is scheduled for Monday, April 3, 2000.

To be headquartered in Tokyo, the new company will have three production sites and two sales offices as well as a technical center in Japan.

The president and the vice president of the JV having a total of 50 employees, will be dispatched from MCI and SBC, respectively.

In the background of the latest move is the situation that the wood adhesives business in Japan is being beset by stagnant demand owing to: decreased housing starts due to the poor economic climate, and the expanding imports of plywood. There is also the excess competition in the market because of the large number of adhesives makers in Japan.

Given such a severe business environment, the key to a successful further development of the wood adhesives business lies in strengthening its cost competitiveness.

Under the circumstances, MCI and SBC have reached the accord this time based on their judgment, that the optimal alternative leading to bolstering the competitive strength of their wood adhesives business would be to pursue a more efficient business operation by integrating the two companies' production, sales and R&D on top of consolidating the production sites and functions.

For further information, please contact :

Mitsui Chemicals, Inc.
Corporate Communications Division
Tel: +81-3-3592-4060
Fax: +81-3-3592-4211
Sumitomo Bakelite Co., Ltd.
General Affairs Dept.
Tel: +81-3-5462-3433
Fax: +81-3-5462-4873