Enhancement of Medical Business in China

Mar. 1, 2010
SEKISUI CHEMICAL CO., LTD.
SEKISUI MEDICAL CO., LTD.

Press Release

The High Performance Plastics Company (President: Takayoshi Matsunaga) of SEKISUI CHEMICAL CO., LTD. (President: Naofumi Negishi, hereinafter Sekisui Chemical) has announced plans to merge two subsidiaries related to medical business in China, in order to enhance business in that market.

1.	Background Until now, BEIJING SEKISUI TRANK MEDICAL TECHNOLOGY CO., LTD. (hereinafter Sekisui Trank) has handled business development in China in the area of vacuum blood collection tubes, and SHANGHAI DAIICHI DIAGNOSTICS, CO., LTD. (hereinafter Shanghai Daiichi) has handled business development in China in the area of clinical reagents. Sekisui Trank, established as a joint venture with a Chinese firm, manufactures and sells vacuum blood collection tubes. In addition to its plant in Beijing, it also has sales facilities located across China, and it is achieving steady sales growth including exports to Asian markets. Shanghai Daiichi provides support for the activities of sales agents in China for reagents exported by SEKISUI MEDICAL CO., LTD. (hereinafter Sekisui Medical). Against a background of a growing Chinese market for reagents, in recent years the value of exports has continued to increase from year to year.

2.	Outline of this merger With this merger, Shanghai Daiichi will be merged into Sekisui Trank, to form a major facility in the Chinese market. Plans call for the merger procedures to be completed in September of this year. Also, plans call for the Sekisui Trank plant that currently produces vacuum blood collection tubes to begin production of clinical reagents as well following the merger. Also, in advance of this merger Sekisui Chemical accepted transfer in December of last year of a 15% of equity stake held by a Chinese joint-venture partner of Sekisui Trank, increasing its stake in the company from 85% to 100%. Furthermore, in February of this year the name of Sekisui Trank was changed to SEKISUI MEDICAL TECHNOLOGY (CHINA) LTD., to develop a unified brand image and increase its presence in the medical industry in China.

Objectives of this merger
Carrying out this merger is intended to enhance customer service through development of a structure for serving the Chinese market even more closely than before and to grow the medical business in China and optimize management of the business.

In addition, the new company resulting from the merger will begin import, manufacture, and sale of clinical reagents in addition to vacuum blood collection tubes.

(i)	Growing the reagent business in the Chinese market (shifting from sales support to import, manufacture, and sale; expanding product lineup and volume)
(ii)	Pursuing business synergies in China (mutual reinforcement of sales networks; new production of reagents in a local plant)
(iii)	Improving business management efficiency

Business objectives
The merged company will aim to achieve net sales of 3 billion yen in 2013.

Outline of the merged company

1)	Company name: SEKISUI MEDICAL TECHNOLOGY (CHINA) LTD.
2)	Business contents: manufacture and sale of vacuum blood collection tubes and import, manufacture, and sale of clinical reagents
3)	Planned date of merger: September 1, 2010
4)	Capital: US $12 million (approximately 1.1 billion yen at the exchange rate US $1 ≈ 90 yen)
5)	Ownership: a wholly owned subsidiary of Sekisui Chemical
6)	Representative: Mutsumi Fukuda, President (also an Executive Director of Sekisui Chemical and General Manager of its Medical Products Division and President of Sekisui Medical)
7)	Employees: approximately 180
8)	Headquarters: Haidian District, Beijing, China

Reference:

Outline of BEIJING SEKISUI TRANK MEDICAL TECHNOLOGY CO., LTD.:

1)	Established: June 2003
2)	Business contents: manufacture and sale of vacuum blood collection tubes
3)	Capital: US $12 million (approximately 1.1 billion yen at the exchange rate US $1 ≈ 90 yen)
4)	Ownership: a wholly owned subsidiary of Sekisui Chemical (since December 2009)
5)	Net sales: approximately 700 million yen (FY 2008 performance)
6)	Representative: Mutsumi Fukuda, President
7)	Employees: approximately 170
8)	Headquarters: Haidian District, Beijing, China

Outline of SHANGHAI DAIICHI DIAGNOSTICS, CO., LTD.:

1)	Established: September 2006
2)	Lines of business: sales support and technical services for clinical reagents
3)	Capital: 3 million RMB (approximately 40 million yen at the exchange rate 1 RMB ≈ 13 yen)
4)	Ownership: a wholly owned subsidiary of Sekisui Medical
5)	Net sales (subcontracting revenue): approximately 200 million yen (FY 2008 performance)
6)	Representative: Tetsuaki Kon, President
7)	Employees: approximately 10
8)	Headquarters: Huangpu District, Shanghai, China

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.