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Agreement to Establish Joint Venture Company in Thailand to Manufacture Chlorinated Polyvinyl Chloride (CPVC)
Feb 21, 2013

SEKISUI CHEMICAL CO., LTD
The Lubrizol Corporation

SEKISUI CHEMICAL CO., LTD. (Tokyo Head Office: Minato-ku, Tokyo. President: Naofumi Negishi, hereinafter called "Sekisui Chemical") and The Lubrizol Corporation(Headquarters: Wickliffe, Ohio, U.S.A. CEO: James Hambrick, hereinafter called "Lubrizol") agreed to establish a joint venture company in Thailand to manufacture chlorinated polyvinyl chloride (CPVC).
Both companies expect the market for CPVC products to grow globally, and in particular expect increased demand in Asia. The manufacturing joint venture company will answer to global customer needs, while anticipating future expansion of production.

 

1. CPVC Features and Applications

CPVC is a special type of polyvinyl chloride (PVC) with added chloride, and is mainly used as a raw material in pipes for supplying hot water, industry, and sprinklers, etc., which require heat resistance.

2. Market Environment

In recent years, the switch from metal to CPVC in pipes used in buildings such as homes and factories, etc., in the emerging countries of South Asia including India, and the Middle East has been progressing. In parallel, construction demand concomitant with economic growth is also booming. Concomitantly, demand for CPVC is growing every year, and solid expansion is also expected in the future.

3. Background to Establishment of Manufacturing Joint Venture Company and Its Objectives

Sekisui Chemical made a decision in November last year to boost the CPVC production capacity this summer of a group company, TOKUYAMA SEKISUI CO., LTD, given the expanding global demand centered on Asia. Moreover the company had also been considering setting up new overseas production bases.
On the other hand, Lubrizol had also made decisions to strengthen its CPVC production capacity in the U.S. and Europe in recent years, and had simultaneously been considering establishing a new production base in Asia.

In this way, both companies had been faced with the necessity to strengthen global CPVC production capacity centered on Asia, and the companies also shared the same views on reducing investment risks, which led to the agreement to establish the manufacturing joint venture company. In addition, Thailand was chosen as the location for the company because of its close proximity to the area of demand, and being able to reap the benefit of the FTA.

Furthermore, in regard to the CPVC compound*, both companies will respectively procure the same amount of CPVC from the Joint Venture Company, which meets the specific requirements of each company. So each of us will establish its own new production site in Asia, and sales activities are to be conducted independently.
*CPVC compound is a substance made of CPVC mixed with additives necessary for the molding process of pipes etc.

4. Overview of the Joint Venture Company (planned)

1) Company Name : Undecided
2) Date of Establishment : Latter half of 2013
3) Amount to be Invested : 50 million dollars (ownership ratio: Sekisui Chemical 51%, Lubrizol Advanced Materials* 49%)
4) Principal Business : Production of CPVC
5) Start of Production : End of 2014
6) Production Capacity : 30,000 metric tonnes / year (Planned to be expanded to 60,000 metric tones in the same site)
7) Address : Hemaraj Eastern Industrial Estate, Map Ta Phut, Rayong, Thailand
8) Number of Employees : Approximately 60
* Lubrizol Advanced Materials is a 100% subsidiary company of The Lubrizol Corporation

5. Overview of Companies Concerned

Company Name SEKISUI CHEMICAL CO., LTD. The Lubrizol Corporation
Address 2-3-17 Toranomon, Minato-ku, Tokyo
(Tokyo Head Office)
29400 Lakeland Boulevard, Wickliffe, Ohio, U.S.A
Representative President Naofumi Negishi Chairman, President, CEO James Hambrick
Month and Year of Establishment March 1947 July 1928
Principal Business
(i) Manufacture and sales of automotive materials, electronic materials, medical products, and other high performance plastics-related products
(ii) Manufacture and sales of pipes and engineering plastics for water supply and drainage systems, building materials, and performance materials
(iii) Manufacture and sales of modular houses, and remodeling business
(i) Manufacture and sales of lubricant additives, and fuel additives
(ii) Manufacture and sales of Coating material, cosmetics materials, personal care materials, and CPVC compound

The Business segment (ii) comes under Lubrizol Advanced Materials.
Sales 965 billion yen (on consolidated basis for fiscal year ended March 2012) Approx. 6.1 billion dollars (on consolidated basis for fiscal year ended December 2011)
Number of Employees 20,855 (on consolidated basis for fiscal year ended March 2012) Approx. 7,000 (on consolidated basis for fiscal year ended December 2011)

6. Additional Comments

Establishment of the manufacturing joint venture company mentioned above will be subject to gaining approval from the competent authorities of the various countries.

Press Contact

Sekisui Chemical Co., Ltd.
Corporate Communication Department, Public Relations Group
Fax: +81-3-5521-0510

Disclaimer

This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.
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