Business Development in Chinese Market
2002.7.4

Establishment of a Joint Venture and a Local Company -
Following the establishment of Asahi Denka (Shanghai) Co., Ltd. in December 2001, the company formed Kukdo Chemical (Kunshan) Co., Ltd. jointly with Kukdo Chemical Co., Ltd.(a Korean corporation) in April 2002 and will also establish Asahi Fine Chemical (Shanghai) Co., Ltd. in July 2002.
(1) Kukdo Chemical Co., Ltd. (Korea), the partner of the joint venture company, is one of the major epoxy resin manufacturers that boasts of 65% or higher market share in Korea and is ranked No.1 in Asia and fourth in the world. Its relation with our company is that Asahi Denka licensed the technologies of Epoxy Resin Hardeners and Polyurethane Secondary Products to Kukdo Chemical. Both companies formed a joint company with the epoxy technology furnished by Kukdo Chemical and the polyurethane technology including PPG (polypropylene glycol) furnished by Asahi Denka.
(2) Asahi Fine Chemical (Shanghai) Co., Ltd. was established as the second step following the establishment of Asahi Denka (Shanghai) Co., Ltd. as the first step for the inroad to Chinese market. It was aimed at initiating the local production of our products, for which a sharp growth is anticipated in the Chinese market, such as functional resins (epoxy resin hardeners, etc.) plastic additives, electronics & information-related chemicals and cleaning & bactericidal agents. It is also planned to start up the production of our food products in 2004 or later.

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