We are pleased to announce that a consortium of Nichimen Corporation (Nichimen) and Chisso Corporation (Chisso) have jointly won the tender from Shanghai Chlor-Alkali Chemical Co., Ltd. (see notes below) for an engineering project to enhance the production capacity of its polyvinyl chloride (PVC) plant in Shanghai, People's Republic of China.

The project, currently scheduled for completion by October 2003, is aimed at enhancing the annual PVC production capacity of the plant from 280,000 to 350,000 tons. The terms of the relevant contract will call for provision of the basic architectural design work, technology (under license) and necessary equipment for a total project value of US$2,500,000, and to be completed by October 2003. Chisso will provide technology related to polymerization and a VCM Stripping Column to be used for removal of vinyl chloride monomer (VCM) from PVC, while Nichimen will handle procurement of the relevant equipment including the VCM Stripping Column. Chisso Engineering Co., Ltd. , a Chisso subsidiary (see notes below), will perform the architectural design work.

Chisso currently licenses more than 50 VCM Stripping Columns worldwide, and also licenses its PVC technology in a number of instances in China. Being selected by Shanghai Chlor-Alkali Chemical is a positive indicator that Chissoﾕs technology is highly regarded.

Demand for PVC in China is growing rapidly, notably for use in window frames of new residential houses and office buildings being constructed. Gross annual demand for PVC in China is estimated at five million tons of which two million tons need to be imported. In order to ameliorate this shortage, a number of new PVC plant construction plans are emerging in China. We expect that four to five plants with production capacities of over 400,000 tons each will be constructed within the next two to three years, and Nichimen and Chisso will keep working together towards winning some of these tenders.


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