Nagase & Co., Ltd. will enhance new business development based on expansion of its manufacturing functions within the Nagase Group. The Company finished all exclusive distributorship operations for major companies in the US and Europe, which had been one of the growth drivers, at the end of the last fiscal year. Nagase & Co., Ltd. decided to shift its focus to development of new businesses with which the Company can strike out the corporate identity by strengthening manufacturing functions centering on Nagase ChemteX, the largest manufacturing company within the Group. The Company will hasten to develop group products and to establish value chains from the upstream sector to the downstream sector while maintaining annual business investment of around 7.0 billion yen, for the time being.

In the spring of 2003, Nagase & Co., Ltd. launched its new medium term three year management plan "WIT21," in which it targets to shift its structure to a business proposal oriented enterprise that creates its own businesses. The structural change includes expanding manufacturing functions. The Company had expanded the business operations through exclusive distributorship agreements with major US and European companies including Ciba-Geigy and UCC in the past but ended all such operations when exclusive distributorship agreement in South East Asia with GE plastics was cancelled at the end of last year. The Company has launched the strategy to enhance manufacturing functions as a new growth pillar for fostering new business.

Nagase ChemteX (NCX- sales of around 20.0 billion yen), which is a core company for this strategy, is the Group's largest manufacturing division formulated following the merger of four companies including the former Nagase-CIBA Ltd.(formulated epoxy products) and Nagase Chemicals Ltd. (functional monomers/Electronics-use chemicals) in spring 2001. NCX shifted its core products to the electronics related materials and the health care products (enzyme and pharmaceuticals) which it views as the growth fields. The Company will expand the business operations by fulfilling its competitive advantages such as small lot production of a variety of products, differentiation from other products using Nagase's global sourcing functions, and fine-tuned response to clients, etc.

In addition, NCX is currently operating based on three plants in Japan such as Fukuchiyama plant (enzyme/fermentation and medical intermediates), Harima plant (formulated epoxy resins and functional monomers) and Itami plant (medical intermediates), and three overseas manufacturing bases in Singapore (photolithography use chemicals), Taiwan (the same) and Wuxi (formulated epoxy products). It intends to invest on businesses for strengthening research and development functions and upgrading productivities in Japan and expanding production capacities in overseas operations for the time being. In Japan, the Company will concentrate on two business bases by closing Itami plant by the end of this fiscal year. It expanded facilities in Singapore and proceeds with the plan to expand the formulated epoxy resin business in Wuxi.

(From The Chemical Daily)