October 30, 2007
Asahi Kasei Corporation
Asahi Kasei Homes Corp.

Improper Acquisition of Ministerial Certification by Nichias Corp.

 
Asahi Kasei Homes has been informed by the Ministry of Land, Infrastructure, and Transport that 60-minute fire-resistance certification for an eave assembly using certain soffit panels produced by Nichias Corp. was obtained improperly. The panels in question have been installed in some 40,000 Hebel Haus™ unit homes and Hebel Maison™ apartment buildings contracted since July 2001; it is now clear that, for this reason, these homes do not meet performance standards for Class IV fire resistance with the relevant components compliant with 60-minute fire-resistance standard as per original specifications.

In accordance with its focus on the development and provision of Long Life Home products featuring long-term safety and security, Asahi Kasei Homes will fulfill its responsibility as the supplier by contacting each homeowner and arranging for remediation to be performed at the earliest possible date which will fully restore the relevant portion of each home to its original specification.

Asahi Kasei Homes offers its sincerest apologies to its customers and other stakeholders of the Asahi Kasei Group for this situation, and especially to customers of affected homes for the inconvenience which will be incurred related to remediation work. Customers are invited to contact Asahi Kasei Homes through a toll-free hotline newly established for inquiries regarding this matter.

Background
Earlier today, the Ministry of Land, Infrastructure, and Transport announced that Nichias used an improperly prepared eave assembly in tests to establish fire-resistance performance, and that certification of fire-resistance performance was granted on the basis of these improper tests. Nichias also made a similar announcement soon thereafter. The soffit panels subject to this improper certification were used in all Hebel Haus™ products contracted since July 2001, with certain exceptions, and in certain Hebel Maison™ products contracted since January 2006.

The homes were designed and sold with specifications for the Class IV fire-resistance performance standard, requiring the eave assembly as tested to meet the 60-minute fire-resistance standard. After it became clear that the certification was obtained improperly, Nichias performed new tests of the eave assembly using the soffit panels in question with representatives of Asahi Kasei Homes in attendance, with test results indicating that the properly prepared test assembly does not meet the 60-minute fire-resistance standard, but only the 45-minute fire-resistance standard. Although this exceeds the minimum a 30-minute fire-resistance standard required by building codes in Japan for components such as eaves, which are considered to be a likely point for fires to spread from one building to the next, it is not sufficient to meet the Class IV fire-resistance performance standard. Asahi Kasei Homes therefore determined to implement remediation as quickly as possible.


Remediation
Asahi Kasei Homes has identified all of the homes using the soffit panels in question. Remediation work will be performed to restore fire-resistance performance of all home units to meet the original Class IV specification.
      
Homes which have been completed and delivered:
Specific methods of remediation to restore the original specification to affected homes are being studied.  Work will be performed in a timely fashion as soon as the proper method has been determined.
   
Homes contracted but not yet under construction:
Designs will be modified to ensure that the homes meet the Class IV fire-resistance specification with a newly obtained certification of 60-minute fire-resistance for the relevant components.
   
Homes under construction:
Designs will be modified to ensure that the homes meet the Class IV fire-resistance specification with a newly obtained certification of 60-minute fire-resistance for the relevant components.
   
Number of units affected
Homes which have been completed and delivered -
Hebel Haus™ unit homes contracted since July 2001*: 37,829 units
Hebel Maison™ apartment buildings contracted since January 2006: 248 units
           Total: 38,077 units
* Tepee™ series models not affected.
Note:  Homes constructed to Fireproof Building standards in accordance with relevant building codes are not subject to remediation work, as they meet performance standards for Class IV fire resistance.
   
Homes contracted but not yet under construction: 5,243 units
   
Homes under construction: 2,046 units
   
Portions of homes using the soffit panel in question
Flat-roof models: Ceilings over verandas, entranceways, and outside corridors; underside of overhangs.
   
Slope-roof models: In addition to the above, underside of eaves.
   
Effect on operating performance
Potential effects on financial results are being studied. If, as a result of informed calculation, a material effect becomes foreseeable, this will be disclosed separately.

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