Ube Industries and Mitsubishi Start Co-Management of Hydrogen Peroxide Joint Venture

TOKYO, December 21, 2007 _ Ube Industries, Ltd. and Mitsubishi Corporation today announced that they have agreed to start co-managing a hydrogen peroxide joint venture company from January 1, 2008.

Kemira-Ube, Ltd. was established in 1989 as a joint venture of Ube Industries and Kemira Oyj (Finland) to engage in the manufacturing and sale of hydrogen peroxide. Ube Industries has obtained all shares owned by Kemira Oyj, selling a 49% stake to Mitsubishi Corporation and retaining 51%, and the company's name will be changed to UBE-MC Hydrogen Peroxide Ltd. (Ube-MC), in January. Ube Industries will supply Ube-MC's Representative Director and President, and Mitsubishi Corporation will provide the Vice-President.

Kemira-Ube commenced the manufacture and sale of hydrogen peroxide in Ube City, Yamaguchi Prefecture in July 1992, using technology supplied by Kemira Oyj. Ube Industries is supplying Kemira-Ube with hydrogen, which is the principal raw material in the manufacture of hydrogen peroxide. This hydrogen is manufactured by employing a unique, environmentally friendly technology that uses coal, petroleum coke (the residue from the refinement of crude oil), and waste plastic.

Mitsubishi Corporation independently engages in sales of hydrogen peroxide through Shinsanso Kagaku Co. (Tomakomaishi, Hokkaido), in which the company currently holds a 50% share. Following the acquisition of the Kemira-Ube shares, Mitsubishi Corporation will sell all of the hydrogen peroxide it receives as a 50% shareholder in Shinsanso Kagaku to Ube-MC, and Mitsubishi Corporation will act as agent for the sale of all Ube-MC products.

Ube Industries and Mitsubishi Corporation entered into the joint-venture contract with the intent of leveraging Kemira-Ube's distribution facilities (specialized vessels, storage facilities/shipping facilities, and others) to develop the company into a highly competitive hydrogen peroxide manufacturer over the medium and long term using a co-management scheme. The objectives of the co-management of the two companies are as follows.

• In response to the Japanese paper and pulp industry's shift to elemental chlorine free (ECF) paper, hydrogen peroxide will be in demand as bleach for pulp and paper. The two companies aim to establish a stable supply source of hydrogen peroxide in a situation where demand will increasingly tend to outpace supply.
  
  Bleaches for paper and pulp have traditionally been based on chlorine, but the desired degree of whiteness can be attained through the use of hydrogen peroxide or chlorine dioxide as substitutes for elemental chlorine, while preventing the escape of elemental chlorine in exhaust gases and wastewater. In Europe and the U. S., virtually all pulp manufacturing is already ECF.
• There are five domestic producers of hydrogen peroxide: Mitsubishi Gas Chemical Co., Inc., Kemira-Ube, ADEKA Corporation, Nippon Peroxide Co., Ltd., and Shinsanso Kagaku. This alliance between Mitsubishi Corporation, which holds 50% of Shinsanso Kagaku located in Hokkaido, and Kemira-Ube of Yamaguchi Prefecture, will confer substantial geographic advantages. Further, the two firms will work to strengthen competitiveness through a review of the company's hydrogen peroxide distribution system, which requires specialized distribution facilities due to the characteristics of the product.
• Through the investment in hydrogen peroxide mainly for the pulp and paper bleaching process, Mitsubishi Corporation is enhancing its sales of hydrogen peroxide, which is central to its product lineup for the pulp and paper industry. In the future, the company will increase its products and sales of chemicals for the pulp and paper industry to further expand its value chain in the chemicals field.
  
  The industrial chemicals field, which includes hydrogen peroxide, is one of Ube Industries' core platform businesses. Ube Industries seeks to secure stable hydrogen peroxide revenues through the further expansion of Ube-MC's user base, which is expected to result from co-management with Mitsubishi Corporation.
• Because the byproducts left behind after the decomposition of hydrogen peroxide are water and oxygen, it is extremely clean and environmentally friendly. To address social concerns with environmental issues, the two companies will engage in joint development of hydrogen peroxide in applications for bleach, oxidizing agents, deodorizers, corrosion preventatives, disinfectants, oxygen supply, water treatment, surface treatment, combustion efficiency enhancers, ultraviolet radiation blockers, and other new applications.