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Asahi Kasei Purchases Dorlastan

November 17, 2005

Asahi Kasei Fibers Corp. (AKF) and Lanxess Deutschland GmbH (Lanxess) have reached basic agreement for the purchase by AKF of the Dorlastan® spandex business of Lanxess, and today concluded a memorandum of understanding to this effect. A final agreement will be executed shortly, with the transaction to proceed pending approval of the relevant antitrust authorities. All Dorlastan® operations and assets, including production facilities in Dormagen, Germany, and Bushy Park, South Carolina, USA, are subject to transfer.

Background and objectives
Spandex under the Roica™ brand is a core business of AKF with competitiveness secured through integrated production from raw material to finished yarn, and technological advances to enable a wide range of performance features such as chlorine resistance and moisture transpiration. The Roica™ supply infrastructure, guided by geographic market developments, comprises four production sites in Asia. In order to enhance the global presence of Roica™, AKF has studied a number of prospects for the establishment of production bases in Europe and North America. The acquisition of the Dorlastan® production facilities in Europe and the US will complement the Asian production sites to effect a complete globalization of Roica™ operations.

Lanxess, based in Germany, is one of the leading chemical companies with operations in basic and fine chemicals. Dorlastan®, marketed since 1964, is one of the world’s leading spandex brands. Today’s announcement is in accordance with an ongoing portfolio realignment whereby Lanxess is focusing on core operations while seeking to transfer non-core businesses to parties which would be better placed to sustain their development and growth.

In recognition of their complementary interests in this regard, the two parties began discussing the potential for such a transaction late last year.

Prospective and outlook
AKF will draw on the solid established customer relationships, marketing and distribution networks, world-class production facilities, and highly skilled workforce of the Dorlastan® business to swiftly and smoothly augment Roica™ operations in Europe and the US, while enhancing the Dormagen and Bushy Park facilities with advanced AKF technology and strategic capital investments.

The heightened presence for Roica™ in Europe and North America will enable acceleration of its adoption in novel applications which are emerging in these markets. The inclusion of Dorlastan® operations will also enable AKF to provide close and responsive customer support in all the major world markets, as Roica™ operations develop with global efficiency and advancing product quality and performance. AKF is targeting sales of ¥40 billion by 2008 for the combined spandex operations.

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