August 8, 2006
Asahi Kasei Chemicals Corporation

Agreement to transfer polystyrene joint venture shares to Dow Chemical
Asahi Kasei Chemicals Corporation (AKCC) and The Dow Chemical Company (Dow) have concluded an agreement for the transfer to Dow of the AKCC shareholdings in their joint venture companies Styron Asia Ltd. in Hong Kong (SAL-HK) and SAL Petrochemical (Zhangjiagang) Co., Ltd. in China (SAL-ZJG).

In the years since their establishment, both equally-owned joint ventures in polystyrene have been highly successful in developing their operations and attaining their objectives. SAL-HK was established in 1994 to build a new base and network for polystyrene supply to Asia, in accord with the need for AKCC to respond effectively to a shift in operations by many of its polystyrene customers to various parts of Asia while advancing its domestic operations directly serving its customers in Japan and meeting the challenges specific to the Japanese market. This was followed by the establishment of SAL-ZJG in 1998 for the production and sale of polystyrene in China, in the light of the rising market potential of that market, and the successful launching of the full-scale production and sales effort by SAL-ZJG in 2002.

In the Japanese polystyrene market, the basic challenge for AKCC since the early 1990s has been to meet the specific needs of the domestic customers in the face of a continuing decline in overall demand. The effort to meet this challenge has been led by PS Japan Corporation, the joint venture of AKCC, Mitsubishi Chemical Corporation, and Idemitsu Kosan Co., Ltd. It has consolidated their domestic polystyrene operations and improved earnings by restructuring, raising efficiencies and reducing costs, and providing differentiated, specialized products of high added value.

This has led to a strategic focus at AKCC on product differentiation, specialization, and added value for polystyrene rather than on volume-centered expansion, as an integral part of its Growth Action - 2010 mid-range corporate initiative. In this light, extensive discussions between AKCC and Dow have now led to their mutual accord for the transfer to Dow of the AKCC shareholdings in their Asian polystyrene joint ventures, SAL-HK and SAL-ZJG.

Preparations are now underway at Dow and AKCC for submission of their applications to the Chinese governmental authorities for approval of the share transfer, and for discussion with customers, suppliers, and other related parties to ensure a smooth and coordinated operational transition.

The broadly based, longstanding relationship of friendship and cooperation between The Dow Chemical Company and the Asahi Kasei Group is close, strong, and enduring, and is constantly directed toward seeking and engaging in new areas and opportunities for growth in mutual cooperation, partnership, and alliance.

Corporate profiles of the joint ventures
Styron Asia Limited (SAL-HK)
President: Joseph Wong (from Dow)
Vice President: Seiichi Iizuka (from AKCC)
Head Office: Hong Kong
Shareholders: AKCC 50%, Dow 50%
Establishment: 1994
Business line: Marketing of polystyrene to customers in China and Japanese customers in Southeast Asia
SAL Petrochemical (Zhangjiagang) Co., Ltd. (SAL-ZJG)
President: Joseph Wong (from Dow)
Vice President: Seiichi Iizuka (from AKCC)
Head Office: Zhangjiagang, Jiangsu, China
Shareholders: AKCC 50%, Dow 50%
Establishment: 1998
Business line: Production and sale of polystyrene
Capacity: 120,000 tons/year (HIPS)
Start-up: November 2002


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