October 31, 2006
Asahi Kasei Corporation

Integration of Asahi Kasei Chemicals and Asahi Kasei Life & Living
The operations of Asahi Kasei Chemicals Corp. (AKCC) and Asahi Kasei Life & Living Corp. (AKLL), core operating companies of the Asahi Kasei Group, will be integrated for unified management and organization beginning on April 1, 2007. Throughout the range of businesses in processed polymers and home-use products, this combination will advance the development and provision of high-quality, high-function products which help make life better.

Strategic business context
The Asahi Kasei Group adopted a holding company configuration in October 2003, with Asahi Kasei Corp. as parent company and operations in each core field of business performed by seven wholly owned core operating companies. AKCC is the core operating company in the field of organic and inorganic chemicals, polymers and elastomers, and related specialty products and systems, while AKLL is the core operating company in the field of home-use products and processed polymers for commercial use in the packaging and preservation of food and many other consumer products.

At the beginning of this fiscal year in April, the Asahi Kasei Group initiated a strategic program of expansion and enhancement of operations in its Growth Action - 2010 business plan, with a key element being the creation of greater added value. As the execution of this plan advanced, it was determined that the growth of business in home-use products and processed polymer products would best be effected by an operational combination of AKCC and AKLL to obtain all potential synergies.

Essentials of the integration
Home-use products:
Asahi Kasei Home Products Corp. (AKHP) will be established as a wholly owned subsidiary of AKCC to operate home-use products businesses. The home-use products R&D functions of AKLL and the marketing and sales functions of AKLL subsidiary Asahi Home Products Co., Ltd. will be transferred to AKHP, which will be managed with broad independence, autonomy, and responsibility for business performance in this field. The development and growth of this business will be advanced by the combination of AKCC's materials, processing technology, and chemical technology with AKLL's home-use products development and marketing capabilities, backed by a strategic commitment of management resources.

Processed polymer products:
AKLL's commercial-use film, sheet, and foam operations and AKCC's film and sheet operations will be integrated and realigned to enable development of high-function, high value-added film, sheet, and foam products for new fields of application, with the processed polymer products business advancing as a strategic management unit for expansion and growth. AKLL affiliates Asahi Kasei Pax Corp. and Sundic Inc. will be managed within the integrated and realigned organizational structure for processed polymer products.

Production and R&D base in Suzuka:
The Suzuka Plant and the Suzuka Wrap Film Plant will together form a strategic world-class base for production and R&D for high-function film, sheet, foam, and other processed polymer products, playing a key role in the advancement and d evelopment of business in this field.

Polyvinylidene chloride (PVDC):
A fully integrated PVDC production structure will be established through the combination of the upstream PVDC operations of AKCC with the downstream PVDC operations of AKLL, positioning the PVDC business for strategic growth in markets worldwide.

Corporate Profiles
(as of October 2006)

Asahi Kasei Chemicals Corp.
President: Taketsugu Fujiwara
Head office: Tokyo, Japan
Total assets: ¥484,382 million
Employees: 5,860
FY 2005 sales: ¥660.4 billion
Asahi Kasei Life & Living Corp.
President: Keiji Kamei
Head office: Tokyo, Japan
Total assets: ¥40,498 million
Employees: 1,135
FY 2005 sales: ¥51.9 billion


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