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)

5. Overview of Companies Concerned

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.