Ube Withdraws from Ebara-Ube Process Recycling Business

May 7, 2010

TOKYO, May 7, 2010 _ Ube Industries,Ltd. today announced that it has decided to withdraw from the Ebara-Ube Process(EUP) business, which recycles waste plastics and other materials under the Act on the Promotion of Sorted Collection and Recycling of Containers and Packaging (Containers and Packaging Recycling Act), utilizing a process that produces synthetic gas for the chemicals industry.

EUP is a pressurized two-stage gasification technology jointly developed by Ube Industries and Ebara Corporation. The two companies originally established EUP Co.,Ltd. in 2001 as a 50/50 joint venture to engage in the recycling of waste plastics and other materials as prescribed under the Containers and Packaging Recycling Act. The process generates a synthetic gas primarily of hydrogen and carbon monoxide for use by the chemicals industry.

EUP is an innovative materials recycling technology that breaks down waste plastics into hydrogen and carbon monoxide at the molecular level, to produce a synthetic gas that is used up to manufacturing plastics(nylon products). Ube Industries in partnership with Ebara Corporation pioneered the gasification method as a certified recycling method under the Containers and Packaging Recycling Act, commencing business operations in the first fiscal year in which the legislation came fully into effect.

Amid increasingly tough business conditions, Ube Industries bought out the shares of Ebara Corporation in September 2007 and made EUP Co., Ltd. into a wholly-owned subsidiary. Ube Industries later absorbed the subsidiary in March 2008 to improve the profitability of the business.

The EUP business uses waste plastics as a primary raw material, but supplies have become increasingly scarce as pelletizing of waste plastic recycling currently receives favorable treatment under bidding administrative guidance for the Containers and Packaging Recycling Act. The scarcity of waste plastics forced Ube Industries to shut down the EUP facilities in June 2008 and examine ways to further streamline the business with a view toward restarting operations in the future.

However, the lack of viable prospects for improving the profitability of the EUP business led Ube Industries to decide to withdraw from the business at this point in time.

Data for Ebara-Ube Process Business

Business Description Recycling of organic wastes for production and sales of synthetic gas
Location of Facility Ube City, Yamaguchi Prefecture
Net Sales 227 million yen (fiscal year ending March 31, 2009)


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