Among the strategic areas set out in the "G-21" medium-term business plan, which started April 2001, the medical products business is to be spun off as a separate manufacturing and sales company to ensure that the business is managed in the most effective manner, and to pave the way for future expansion.


1. Background, Objectives

The company's medical products business began with its entry into the field of contact lenses in 1972. This was followed by the fields of artificial organs in 1976 and dental materials in 1978, and these operations continue to be carried out today. The business is conducted both within Japan and overseas, the production base for all of these lines being the Kurashiki Plant in Okayama Prefecture.

With the advance of globalization, rapid changes in the medical business environment such as revisions to the national medical insurance system and Pharmaceutical Affairs Law, and intensifying competition, business conditions in the medical fields are becoming increasingly difficult. To triumph over competition from dedicated manufacturers it is essential to be able to respond appropriately and swiftly to the changing market environment, including by clarifying business objectives, building an operating structure tailored for each business activity, slimming down the organization, and broadening the delegation of authority. For Kuraray to expand its targeted medical fields under these conditions, it has been decided to spin off this business, including its production division.

The following are the objectives of the spin-off.

(1) Fostering of management tailored to each business activity
As a manufacturer of final products in the medical field, to build a management structure appropriate to each business activity - artificial organs, dental materials, and contact lenses. Additionally, in each of the three activities we will integrate production, development, and sales, thereby fostering fast-moving and efficient management.
(2) Ensuring specialized and systematic management
Since the majority of products are licensed medical products, specialization will be further enhanced under an independent organization. Among the steps that will be taken to ensure this are the recruitment of experienced staff from other organizations and the employment of outside experts
(3) Create an employee-evaluation system that better reflects specialized expertise and contribution to the business
As individuals are required to possess specialized expertise and must exercise broad-ranging discretion, a more flexible employee-evaluation system that better reflects their specialized expertise and contribution to the business is to be introduced.

2. Outline of Spin-Off and New Company (scheduled)

Establishment date October 1, 2001
Company name Kuraray Medical Inc.
Head-office address 1621 Sakazu, Kurashiki, Okayama (on the present Kurashiki Plant site)
President Katsumi Ohashi (currently Director & General Manager, Medical Products Division)
Activities production, development, and sale of medical products.
Capital ¥2.5 billion (Kuraray 100%)
Sales approx. ¥15 billion annually
Employees approx. 330