Mitsui Chemicals Buys Out Ube Industries Shares In PP Compounding Joint Venture

March 29, 2002

Japan's Mitsui Chemicals, Inc. (Mitsui) will acquire the entire 60 % of the shares held by Ube Industries, Ltd. (Ube) in Ube's American polypropylene (PP) compounding joint venture ATC Inc.(ATC), in a bid to strengthen its global supply capability, Mitsui announced today. The actual acquisition transaction will be made between Mitsui and Ube's respective U.S. subsidiaries Mitsui Chemicals America, Inc. (MCA) and Ube Corporation [USA] (Ube-USA), effective May 1 this year.

The shareholding composition of ATC after MCA's acquisition of all of Ube-USA's shares will be 60 percent MCA, 16 percent Marubeni Corporation (Marubeni), a major Japanese trading company, and 24 percent Marubeni America Corp., Marubeni's local subsidiary.

Originally established in December 1985 and capitalized at 4.1 million dollars, ATC located in Nashville, Tennessee, ATC has a total production capacity rated at 55,000 ton/yr, inclusive of 11,000 ton/yr of ATC's fully owned Mexican subsidiary ATC Mexicana S.A. de C.V. in Aguascalientes.

The acquisition this time is a part of Mitsui's global strategy to bolster and expand its four-pole (Japan, Asia Pacific, the Americas and Europe) supply setup in the current trend of materials business in which major customers such as car manufacturers are accelerating their global expansion based on the concept of same quality and simultaneous supply worldwide.

Through this latest move, Mitsui intends to pursue a further strengthening of the cost competitiveness and product development capability of its U.S. PP compounding business of ATC and its existing American affiliate company Color & Composite Technologies, Inc. (CCT), by integrating their management and operation under MCA.

CCT, located in Sydney, Ohio, is also engaged in the production and sale of PP compounds, with a production capacity of 65,000 ton/yr. It was established in June 1986 at a capital of 10 million dollars and is owned 65 percent by MCA, 26 percent by the trading company Mitsui & Co., Ltd. (MBK), and 9 percent by Mitsui Plastics, Inc, an MBK local subsidiary.

After the acquisition, it is expected that Mitsui's total PP compounding capability will reach 120,000 ton/yr and is the highest level in North America.