“Taiyo Nippon Sanso and Mitsubishi Chemical Holdings announced that they have executed a new capital and business

By utilizing these funds, Taiyo Nippon Sanso (TNSC) expects that in 5 years time it will record an increase of annual sales of 60 billion yen, with that of an ordinary profit of 15 billion, making for increases in both earnings and profit.

On September 26, TNSC concluded a capital and business agreement (the Agreement) with its largest shareholder, Mitsubishi Chemical Holdings (MCHC). Through this agreement both companies will be able to expand their business in the field of petrochemical and medical products in North America and Asia. Through the Agreement, TNSC will increase its capital based on an increase of allocation of new shares to third parties, with MCHC as the recipient. The amount of capital procured comes to about 30 billion yen. Based on this increase in capital, the ratio of MCHC in TNSC will rise up to 27%.

TNSC will utilize these funds for a wide range of activities. It will invest in its on-site business in North America, Vietnam, and the Philippines. It will also use these funds as resources for M&A of distributors and local gas companies. The funds will also be used for its production setup in Japan for liquid carbon dioxide, and Water-18O stable isotope. During the next 5 years on the average it anticipates such results as an increase of annual sales of 12 billion yen with that of an ordinary profit of 3 billion yen every year, making for increases in both earnings and profit.

In addition, it will utilize the synergetic effects from alliances with the companies under the MCHC auspices. It is also aiming at such synergetic effects as the establishment of an on-site business at the MCHC chemical plant which sourced from shale gas plant in North America. TNSC is also targeting synergetic business effects from sales of the CFRP containers and of the artificial carbonated springs of its group. After the execution of the Agreement, the 2 companies will set up a working group and look into specific areas of cooperation.

TNSC has the idea of increasing the growth potential of its business globally by solidifying its tie up with MCHC, the major chemical company. At the same time this means it will be prepared to withstand the threat of acquisition by global majors.

MCHC is a general chemical producer with 4 companies under its wing, these being Mitsubishi Chemical, Mitsubishi Tanabe Pharma, Mitsubishi Plastics, and Mitsubishi Rayon. Sales quite recently have totaled around 3 trillion yen, with an ordinary profit of around 87 billion yen and with a net profit for the term of 18 billion yen (as of March, 2013).

Originally Mitsubishi Chemical held 34.85% of the issued stock of Taiyo Toyo Sanso, the predecessor of TNSC. When it merged with Nippon Sanso and became TNSC, Mitsubishi Chemical became the leading shareholder for them, with 10.09%. Later too, it bought stock on the open market, turning this now into the ratio of 15.12%.

alliance agreement.”