Kuraray has announced its decision to expand its VECTRAN polyarylate superfiber manufacturing facilities at Kuraray Saijo Co., Ltd. (Saijo City, Ehime Prefecture) in order to respond to increased demand. With the capital investment expected to total ¥700 million, the Company will establish new spinning facilities, while implementing debottlenecking steps for its existing heat treatment processes. Production capacity will be raised from the current 600 tons to 1000tons per year. Construction is scheduled for completion in October 2007.

Kuraray started manufacturing VECTRAN in 1990 at its then Kuraray Saijo Plant. In April 2005, the Company acquired the VECTRAN high-performance polyarylate fiber business of Celanese Advanced Materials Inc. (CAMI), based in South Carolina, the United States. After the acquisition, this business became a division of Kuraray America Inc. (KAI), the U.S. subsidiary of Kuraray. This acquisition made the Kuraray Group the world's sole source of VECTRAN fiber. Since then, Kuraray has worked to further the business and expand product sales on a global scale.

VECTRAN fiber is commonly portrayed as a super-high-performance fiber with ultra-high strength and a high Young's modulus. VECTRAN is characterized by its low creep, zero moisture-absorption properties, high tenacity at extremely low temperatures, abrasion resistance in wet conditions and other properties that competing types of superfibers do not carry.

In addition to its existing applications, such as its use in the fisheries industry, VECTRAN is increasingly employed in new applications in various industries in Japan. New applications include earphone cables, tension members for stratospheric airship sheathing, volleyball and tennis nets and ropes, ropes for marine research, and plastic reinforcement materials, all of which require the very high performance attributes of VECTRAN.

VECTRAN fiber was also selected for the special airbags used on NASA's 1997 "Mars Pathfinder" landing vehicle, and then again in 2004 for the special airbags used on the "Spirit" and "Opportunity" Mars rovers. CAMI has developed a broad range of VECTRAN applications in the U.S. market, which led to orders from NASA.

In the recent European and U.S. markets, VECTRAN fiber is used for protective gloves, ropes and ground fabric for sheathing, as well as civil engineering and construction materials and optical cables. With further expansion into new application fields, Kuraray expects to see additional growth of the VECTRAN business.

The acquisition of CAMI allowed Kuraray to directly participate in the large-scale European and U.S. markets, which significantly helped the Company's information-gathering activities in terms of meeting market needs in a more timely and accurate fashion. In addition, thanks to the integrated manufacturing and sales structure that Kuraray has established over the years, it is now possible to accelerate the expansion of its VECTRAN business, based on the geographical centers of Japan, the U.S. and Europe. The Kuraray Group considers the capital investment for the aforementioned facility expansion as the first step in its global strategy implementation.

Outline of Facility Expansion

1. Location
Kuraray Saijo Co., Ltd.
892 Tsuitachi, Saijo City, Ehime Prefecture
2. President
Yasuhiro Hirose
3. Capital
¥10 million; A wholly owned Kuraray subsidiary
4. Capital investment
¥700 million
5. Production capacity increase
400 tons (from 600 tons to 1,000 tons per year)
6. Planned completion
October 2007