Mitsubishi Chemical Corporation (Head Office: Minato-ku, Tokyo, President: TOMIZAWA Ryuichi, referred to as "Mitsubishi Chemical" hereafter) and Tokai Carbon Co., Ltd. (Head Office: Minato-ku, Tokyo, President: OHTAKE Shikio, referred to as "Tokai Carbon" hereafter) reached an agreement to proceed to discuss the details of a business alliance. The outline of this business alliance is that (1) the both companies will jointly invest to establish a new company (referred to as "New Joint Venture Company" hereafter. For outline of the New Joint Venture Company, please refer to the attached sheet.), and that (2) Mitsubishi Chemical will transfer its carbon black business (including SBR carbon master batch) to the New Joint Venture Company. The both companies proceed to discuss the details of this business alliance, and are planning to establish a New Joint Venture Company in April 2005 subject to judgment and approval of the Fair Trade Commission.

   Carbon black of Mitsubishi Chemical, which is manufactured with its proprietary technologies by using tar derivatives extracted from producing cokes, is highly evaluated on quality, performance and so on by a wide variety of customers. Favorable business results have continued due to a high demand mainly in the domestic car tire market. On the other hand, considering the future business conditions of carbon black in Japan, we have to cope with more intensified competition in domestic market including the impact of import products, and to go into an active marketing in Asia, mainly in growing Chinese market. This alliance with Tokai Carbon, which is the largest carbon black manufacturing company in Japan, will create synergy of production, sales, technology and so on in Japan. Moreover, in future, deepening business cooperation in overseas with Tokai Carbon, which has already advanced in Asian Market. lt may result in strengthening the competitive edge of quality, cost, supply and so on in Asian market. By strengthening carbon black business taking into account future business scope in overseas, Mitsubishi Chemical believes that this alliance will contribute to further competitive edge of its all carbon related business, of which its cokes business is at the core, in Mitsubishi Chemical Group.

   Tokai Carbon, which regards carbon black as one of its core business, is a general manufacturing company of carbon products. While it has established a firm position in domestic market of carbon black business, it is positively forwarding a business development in Asia such as it advanced to Thailand in 1989 and established a subsidiary in Tianjin city of China in April 2004 jointly with Sumitomo Corporation. Because Tokai Carbon believes that this alliance allows not only strengthening competitive edge in Japan but also forwarding a development of Asian market, it reached the agreement with Mitsubishi Chemical.

Attached Sheet

Outline of New Joint Venture Company (Planned)

(1)  Name of the Company : Undecided (2)  Inauguration : April 1st, 2005 (3)  Head Office : Undecided (4)  Plant Location : Kurosaki (Fukuoka-ken), Yokkaichi (Mie-ken) (5)  President : Undecided (6)  Capital : Undecided (7)  Ownership : Tokai Carbon 60%, Mitsubishi Chemical 40% (8)  Business : Manufacturing, Sales and R&D of Carbon Black (including SBR Carbon Master Batch) (9)  Annual Sales : Approx. 20 billion yen