SEKISUI CHEMICAL CO., LTD. (Headquarters: Osaka; President and Representative Director: Teiji Koge; hereinafter, “SEKISUI CHEMICAL”) has acquired all of the shares in Veredus Laboratories Pte. Ltd. (Headquarters: Singapore, CEO: Rosemary Tan; hereinafter, “VL”), which develops, manufactures and sells molecular analyzers and diagnostic reagents, from companies including Accuron Technologies Limited.

1. Background

While the market scale for diagnostic reagents and analyzers has remained stable in Japan at around 500 billion yen, slight increases have been observed in recent years. Meanwhile, the global market is considered to be approximately 6 trillion yen, and the market is predicted to expand with economic growth in developing countries.

High Performance Plastic Company (President: Keita Kato) of SEKISUI CHEMICAL has positioned life sciences as one of its strategic focus. The company is making efforts to expand the life science field mainly in the medical business through in-vitro diagnostic reagents and analyzers, carried out centrally by its 100% subsidiary, SEKISUI MEDICAL CO., LTD. (Headquarters: Chuo-ku, Tokyo, President and Representative Director: Hideo Tagashira; hereinafter: SEKISUI MEDICAL).

At SEKISUI MEDICAL, in the 5-year midterm management strategy “HIYAKU 2020”^＊１ which covers FY2016 through FY2020, entering into new markets has been positioned as one of its basic strategy. It aims to cultivate markets in regions such as China and Asia, where market growth is expected going forward.

^＊１ Refer to press release dated January 14, 2016

2. Reason for stock acquisition

By the incorporation of VL’s unique technology, products and sales channels, the SEKISUI CHEMICAL GROUP will aim to expand its life science field of into a business which has global presence. Specifically, the following two effects are anticipated in particular.

(1) Establishment of ASEAN sales base and sales support system

While VL sells its own products mainly in Singapore, VL will be utilized as a sales base for the ASEAN region. The aim will be to introduce and expand the sales of the diagnostic reagent and analyzer products of the SEKISUI MEDICAL GROUP, which already has a presence in Japan, China and Europe. Sales support system, including response to regional laws and regulations such as product authorization and technological services that satisfy local needs, is essential for such introduction and expansion of sales. The knowledge held by VL, which has developed its business over many years in the ASEAN region, will be utilized to construct such a system.

(2) Business area expansion and creation of technological synergy

SEKISUI MEDICAL has positioned the five fields of clinical chemistry/immunology, blood coagulation, diabetes, POCT and blood collection tubes as focus areas in the diagnostics business, which is the company’s core business. VL has a lineup of molecular biological products on a lab-on-chip platform for the detection of pathogens in various fields. These include tests for tropical infections such as Zika, Malaria and Dengue. Other panels include Influenza subtyping; species differentiation and drug resistance for Mycobacterium tuberculosis; food pathogen tests for bacteria such as salmonella and dysentery bacillus, as well as biosurveillance tests for biological weapons such as anthrax and smallpox. Such technology and products from VL will be incorporated into our life science business to expand the business area and produce technological synergy.

3. Summary of Subsidiary Company Being Transferred (Veredus Laboratories Pte. Ltd.)

4. Impact on Business Results

This acquisition has limited affect to the consolidated performance of SEKISUI CHEMICAL for the period ending March 2018.

＜Reference (1) SEKISUI MEDICAL Summary＞

＜Reference (2) Main measures (M&As etc.) recently implemented by SEKISUI CHEMICAL in the life science (medical) field＞