Asahi Kasei Fibers is to cease in-house production of polyester and monofilament yarns and close its plants at the end of September 2009. With the closure of its polyester plant, the company will transfer production of its main specialty polyester yarns to Teijin Fibers Ltd., and focus on the development of business in knit fabrics for activewear, including athletic wear and swimwear. The monofilament business of Asahi Kasei Fibers, including both production and sale, will be transferred to Uniplas Corp., a leader in the field of monofilaments, effecting a complete withdrawal from this field by Asahi Kasei Fibers.

With this structural transformation, Asahi Kasei Fibers will refocus management resources on its core businesses in Roica elastic polyurethane filament (spandex), Bemberg cupro regenerated cellulose fibre, nonwovens, and Leona nylon 66, accelerating progress under its mid-term management initiative.

The polyester and monofilament businesses of Asahi Kasei Fibers both began in 1969. Securing satisfactory profitability has been a long-term challenge since the 1990s, with a dramatic transformation of the operating environment including a rising exchange value of the yen and the growing market presence of competing producers in Korea, Taiwan, and China.

Measures to enhance operating performance have included both the advancement of specialty, high-value products and the streamlining of the production infrastructure. Nevertheless, with broad swings in the price of petroleum-based feedstocks in recent years followed by a persistent decline in global demand, it was deemed that there were no clear business prospects warranting reinvestment for the future, and the decision was made to cease in-house production.

The effect of this structural transformation on financial results is now being examined. An appropriate announcement will be made as necessary when precise figures are determined.

Outline of the structural transformation

Polyester

• In-house production will cease at the end of September 2009, and the plant in Nobeoka, Miyazaki, Japan, will be closed
• From October 2009 onward, the polyester business of Asahi Kasei Fibers will advance as follows:
  • Production and sale of knit fabric for activewear will continue, with production of the main specialty polyester yarns such as Technofine transferred to Teijin Fibers for supply on an OEM basis. The development and growth of this business will focus on blended fabrics comprising Roica spandex, Bemberg cupro, and other competitive materials of Asahi Kasei Fibers.
  • The sale of Impact^TM and other woven fabric for activewear and of 100% polyester lining fabric will cease at the end of March 2010. In April 2010 the production and sale of these products will be transferred to Teijin Fibers.

The sale of certain polyester yarns and other products not to be transferred to Teijin Fibers will cease at the end of March 2010.

Monofilament

• In-house production will cease at the end of September 2009, and the plant in Nobeoka, Miyazaki, Japan, will be closed.
• Necessary technology and production equipment will be transferred to Uniplas beginning in October 2009.
• Sale of monofilament by Asahi Kasei Fibers will cease at the end of December 2009, after which production and sale will be undertaken by Uniplas.

Employees

• Employees working in the polyester and monofilament businesses are in principle to be repositioned within the Asahi Kasei Group.

Business overview

Polyester

Sales: ¥11.1 billion (fiscal 2007)

Plant location: Nobeoka, Miyazaki, Japan

Employees: 199 (including manufacturing subsidiary)

Production volume: 8,000 tons (fiscal 2007)

Monofilament

Sales: ¥800 million (fiscal 2007)

Plant location: Nobeoka, Miyazaki, Japan

Employees: 47 (including manufacturing subsidiary)

Production volume: 1,000 tons (fiscal 2007)