Ube Industries to Embark on Third Production Expansion for Gas Separation Membranes

December 27, 2006

TOKYO, December 27, 2006_Ube Industries, Ltd. announced today that it will further expand production of polyimide hollow fibers used for gas separation membranes. The expansion will take place at the Ube Chemical Factory. It comes on the heels of the company's recent decision in August 2006 to embark on a second expansion for production of polyimide hollow fibers. The latest expansion is designed to meet surging demand for nitrogen separation membranes and alcohol dehydration membranes.

The expansion is anticipated to go online in January 2008, boosting Ube Industries' annual production capacity to 1.8 million kilometers of fiber. The current production capacity stands at 0.5 million kilometers of fiber, which will double to 1.0 million kilometers of fiber when the previously announced second expansion goes online in October 2007.

Ube Industries also announced that it is expanding production of gas separation membrane modules at the Sakai Factory. The move will boost the company's production capacity for gas separation membrane modules to 80,000 units annually between two factories (Sakai Factory and Ube Chemical Factory). The current production capacity for the company stands at 20,000 units per year, which will double to 40,000 units after the latest expansion goes online in January 2007.

The gas separation membrane business at Ube Industries was previously focused on sales of hydrogen separation membrane modules for use in hydrogen recovery by the petroleum refining and chemical industries. However, many new applications have been discovered in recent years for nitrogen separation membrane modules, driven by an increasing global emphasis on safety. Demand for the modules is on the rise, primarily for explosion-proof applications for chemical plants and in the petroleum and coal industries. In particular, there has been a recent surge in demand for applications such as nitrogen filling of tires in Europe and North America and for explosion-proof applications relating to passenger aircraft fuel tanks. As a result, there is currently a worldwide shortage for supply of nitrogen separation membranes.

Ube Industries has established proprietary technology that enables alcohol dehydration using organic membranes. Alcohol dehydration membranes manufactured using this technology are being rapidly adopted by large ethanol refining plants, mostly in Europe and North America, as they seek to keep up with growing demand for bioethanol as a gasoline additive. Ube Industries has been facing a surge in demand for alcohol dehydration membranes from fiscal 2006 onward, driving the company to further ramp up its production capacity to meet the growing demand.


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