Toagosei Co., Ltd. and Mitsubishi Chemical Corporation reached basic agreement on the consolidation of vinyl chloride business and decided to start a new joint venture. Both companies will proceed with the studies of the details to be able to establish the new company starting April 2000, unless any special problems regarding the Antitrust Law exist.

 Since May 1998, both companies have been swapping their vinyl chloride polymer utilizing their production sites in east and west part of Japan to rationalize the logistic cost as well as other joint efforts for the rationalization. However, the business environment of vinyl related products has been more stringent year by year and the profitability is not satisfactory due to the long time stagnancy of domestic demand and keen international competition.

 Under such circumstances, both companies agreed that it is indispensable to fully consolidate the business by the establishment of joint production and sales company for strengthening sales, R&D and technical service activities and to restructure production system for the cost reduction. The gist of the agreement is as follows: