Mitsui & Hankuk Carbon Co in strategic alliance agreement for processing of composite materials

11-Mar-16

Mitsui & Co., Ltd. and Hankuk Carbon Co., Ltd. ("HC"), a company listed on the Korea Exchange, entered into a strategic alliance agreement to engage in collaborative business activities relating to the processing of composite materials. Based on this agreement, Mitsui will acquire a 10% equity stake in HC (on a voting rights basis) for an investment of KRW 30.6 billion (approximately ¥2.8 billion JPY). Action to tackle global warming has become an urgent international priority. The development of lighter parts and materials to reduce energy consumption by transportation equipment, especially in motor vehicles, is seen as an important approach to the solution of this problem, and the market for lightweight materials, such as carbon fiber, is expected to expand rapidly. However, use of these materials has so far been limited by high manufacturing costs, and wider use will require the development of cost-competitive materials and parts. HC, established in 1984, has developed and expanded its unique capabilities to manufacture a variety of composite products. It plans to accelerate the development of its composite materials by targeting aerospace, automotive and other transportation equipment fields for which high growth is projected in the future. Mitsui strives to develop business initiatives in the seven key strategic domains defined in its New Medium-term Management Plan. This investment spans two of those key strategic domains: "mineral resources and materials", and "mobility". In April 2015, Mitsui signed an agreement concerning cooperation on composite materials research and an equipment lease agreement with the Innovative Composite Materials Research and Development Center ("ICC") of the Kanazawa Institute of Technology. Mitsui and ICC have since commenced collaborative development of new manufacturing methods for automotive parts and other products made of carbon fiber composite materials. On February 27, 2016, Mitsui entered into an agreement to acquire a 25% stake in Hexagon Composites ASA, a Norwegian manufacturer of composite pressure vessels. Mitsui and HC have built a strong partnership based on a business relationship spanning almost 30 years. Under the new capital alliance, the two companies will respond to the need for lighter transportation equipment by building and strengthening a manufacturing supply chain for materials and parts made of carbon fiber and other composites.