Press Room 2005
January 31, 2005
Mitsubishi Rayon Co., Ltd.
Carbon Fiber Business
Mitsubishi Rayon Co., Ltd. (Head office: Minato-ku, Tokyo; President, Yoshiyuki Sumeragi) decided to increase the production capacity of Grafil Inc., a US subsidiary in response to the rapid expansion in demand for carbon fiber and to outsource production to the SGL Carbon Group as the first step of a collaboration. The details of this decision are as follows:
· Increase in production capacity of Grafil Inc. in the United States
Manufacturing plant : Grafil Inc., California, U.S.A.
Production capacity : Expansion by 500 tons/year from 1,500 tons/year at the current level to 2,000 tons/year
Scheduled start : 4th quarter of 2005

· Outsourced production to the SGL Group
Commissioned plant : SGL Technic Ltd., Scotland, United Kingdom
Outsourced production
volume :
500 to 750 tons/year
Scheduled start of : 1st quarter of 2006
outsourced production
Type :
regular tow

   The Mitsubishi Rayon Group is a leading manufacturer of polyacrylonitrile (PAN) carbon fibers.
   The carbon fiber business is a core business in its Acrylonitrile (AN) Business Complex. Through an integrated production system that encompasses the production of AN monomers, carbon fiber, prepreg and finished products such as golf shafts, the Company has maintained a strong competitive edge and has continued to strengthen its presence in the market for industrial and sports/recreational applications since it started production of prepreg on a full-scale in 1976. In 2005 the Company expects to obtain qualification to become a supplier for the A380, a key aircraft in Airbus’ next-generation fleet.
   The carbon fiber market has been growing in the sports/recreational applications and space and aviation applications as well as in a range of other industrial sectors. This growth has resulted in a steady increase in demand. Now there is concern about imbalance between demand and supply. On the verge of expanded applications for pressure vessels and wind power generation, with the emergence of a new automobile-related market, carbon fiber manufacturers are urged to establish their production systems to ensure future stable supply.
   Under these circumstances the Mitsubishi Rayon Group has not merely increased its carbon fiber production capacity in the United States but also formed an alliance with the SGL Carbon Group. With these initiatives the Company hopes to secure a carbonization facilities in the European market. The SGL Carbon Group is a leading European manufacturer of carbon fiber compound materials. By developing a complementary relationship with the SGL Carbon Group the Mitsubishi Rayon Group can be in a better competitive position in the expanding market.
   In addition, the Group has started studying the feasibility of launching a new carbonization line with an approximate production capacity of 2,000 tons per year in Japan in the third quarter of 2007 to meet market needs.

Corporate Profile of Grafil Inc.
Representative : Shoichi Usui, President
Head office : 5900 88th Street Sacramento, CA 95828, United States
Capitalization : 1.207 million dollars (as of Dec. 31, 2004)
Ownership : Mitsubishi Rayon America Inc. 100%
Line of business : Manufacture and sale of carbon fiber

Corporate Profile of SGL Carbon AG
Representative : Robert J. Koehler, CEO
Head office : Rhingaustrasse 182/65203 Wiesbaden/Germany
Line of business : Manufacture and sale of graphite materials and carbon fiber composites
Capitalization : 117 million euro (as of Dec. 31, 2003)
Sales : 1,046 million euro (in FY 2003)

Carbon fiber production capacity of the Mitsubishi Rayon Group
(Unit: Tons/year)
  January 2005 1st quarter of 2006
U.S.A. 1,500 2,000
Japan 3,200 3,200
Europe* 0 500 to 750
Total 4,700 5,700 to 5950
* The European figures represent the outsourced production volume.
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Public and Investor Relations Office
The contents shown herein are accurate as of the time of posting.