kuraray


News Releases 2006

Integration of dialyzer and therapeutic apheresis device businesses

Decmber 14, 2006
Kuraray Co., Ltd.
Kuraray Medical Inc.
Asahi Kasei Pharma Corp.
Asahi Kasei Medical Co., Ltd.

Asahi Kasei Medical (AM), wholly owned subsidiary of Asahi Kasei Pharma, and Kuraray Medical (KM), wholly owned subsidiary of Kuraray, have reached basic agreement for the integration of their respective businesses in medical devices for blood purification. Implementation is pending approval by Japan's Fair Trade Commission and conclusion of a final agreement between AM and KM. October 1, 2007, is targeted as the start-up date for the integrated operation, to be named Asahi Kasei Kuraray Medical Co., Ltd.

The medical device businesses to be integrated are those in the field of dialyzers, or artificial kidneys, and the field of devices for therapeutic apheresis. The market for devices in each of these fields is forecast to grow worldwide as access to increasingly advanced medical diagnosis and care continues to expand.

Background

In June 2006 AM and KM established A-K Membrane Manufacturing Co., Ltd. (AKMM) as a joint venture for the production of EVAL ethylene-vinyl alcohol copolymer (EVOH) hollow-fiber membrane for use in medical devices. The decision to implement a full integration of the dialyzer and therapeutic apheresis device businesses of the two companies is based on a determination that this would best effect the development of a richer product lineup through advances in the application of hollow-fiber membrane technology for medical therapy.

AM produces devices based on polysulfone hollow-fiber membrane technology, the global standard for high-performance clearance of low-molecular-weight proteins, and devices based on cellulose hollow-fiber technology, while KM produces devices based on EVAL hollow-fiber technology, featuring outstanding biocompatibility and enabling mild and gentle therapy for older patients and those just beginning treatment.

Outlook

The two companies' products and technologies complement one another to afford a wider range of options to optimize therapy to match the specific needs of each patient, as aging demographics and growing prevalence of lifestyle-related diseases leads to a greater diversity in terms of underlying disease, pathological condition, and patient age and lifestyle. The integration of the two companies' hollow-fiber technology and know-how will accelerate the development of next-generation devices which offer greater safety and efficacy in both hemodialysis and the treatment of intractable diseases by therapeutic apheresis.

The integrated operation will thus enjoy a solid position as a global leader in medical devices, and be well placed for expansion and growth. In addition to technological and product synergies, the integration will enable greater efficiency in administrative and supply chain management functions, as well as provide greater resources to invest in R&D, plant, productivity, quality control, scientific affairs, and marketing – ultimately enhancing the overall capability to maintain the trust and satisfaction of the medical community.

Integration process

The Sepacell™ leukocyte reduction filter and Planova™ virus removal filter businesses of AM will be transferred to a newly established company. AM, retaining its dialyzer and therapeutic apheresis device businesses, will be renamed Asahi Kasei Kuraray Medical Co., Ltd. The dialyzer and therapeutic apheresis device businesses of KM will be transferred to Asahi Kasei Kuraray Medical. KM will retain its dental adhesive and filling resin business. AKMM will become a wholly owned subsidiary of Asahi Kasei Kuraray Medical Co., Ltd. Subsequently, AKMM will be merged with Asahi Kasei Kuraray Medical Co., Ltd.

Profile of the integrated business

Company name Asahi Kasei Kuraray Medical Co., Ltd.
President To be named from Asahi Kasei Medical
Scheduled start of operation October 1, 2007
Paid-in capital Pending final decision
Shareholding 85% Asahi Kasei Pharma, 15% Kuraray Medical
Head office Tokyo, Japan
Business line Development, production, and sale of dialyzers and therapeutic apheresis products
Production sites Nobeoka, Miyazaki, Japan; Oita, Japan; Hangzhou, Zhejiang, China
Sales offices Japan, US, EU, China, Korea
Employees Approx. 1,400
FY 2007 sales forecast ¥40 billion (annualized)
FY 2010 sales forecast ¥50 billion

Asahi Kasei Medical corporate profile

President Yasuyuki Yoshida
Establishment July 1974
Paid-in capital ¥800 million
Shareholding 100% by Asahi Kasei Pharma
Head office Tokyo, Japan
Main products Dialyzers, therapeutic apheresis products, leukoreduction filters for transfusion, virus removal filters
Production facilities Nobeoka – production of hollow-fiber dialyzer membrane and other products
Oita – assembly of dialyzers and blood filters
China – assembly of dialyzers
Employees Approx. 1,700 (as of Mar. 31, 2006)
Sales ¥40.1 billion (year ended March 2006)

Kuraray Medical corporate profile

President Hideo Horii
Establishment June 2001
Paid-in capital ¥2.5 billion
Shareholding 100% by Kuraray Co., Ltd.
Head office Tokyo, Japan
Main products Dialyzers, therapeutic apheresis products, dental adhesive and filling resin
Production facilities Kurashiki – production of hollow-fiber dialyzer membrane, dental adhesive, and dental filling resin
Employees Approx. 340 (as of Mar. 31, 2006)
Sales ¥12.8 billion (year ended March 2006)

EVAL is a registered trademark of Kuraray Co., Ltd.
Sepacell™ and Planova™ are trademarks of Asahi Kasei Medical Co., Ltd.