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For the 77th terms from April 1, 2000 through to March 31, 2001

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During the report term, the Japanese economy has continued a mild upswing shown by such as intension in private equipment investments thanks to brisk business in information technology-related industry and an increase in exportation to Asia. On the other hand, however, an economic downward trend has appeared in the last half of the term, as seen in such economical irregularities shown by a decrease in exportation accompanied by a sharp decline in the U.S. economy, an ongoing decrease in prices, and a flagging stock market.

The chemical industry has recorded a steady demand on the whole. Yet, raw materials prices of petrochemical products are escalating further and conditions remain very severe.

Under these conditions, Chisso Corporation has made every effort to enhance the company's profit base while realizing an enlargement in high performance products area enjoying a brisk demand by concentrating managerial resources, promoting a structural change to non-profitable businesses by taking radical measures, performing a complete rationalization such as retrenchments of expenditures.

While the present term closed with a sales figure of slightly over 132,470 million yen at a level somewhat below the previous term, as a result of dividing a part of business enterprises, ordinary profits, given as 5,330 million yen, were vastly improved than the previous term, thanks to also a waiver of interest to liabilities subjected to foregone financial supports by financial institutions concerned.

The special profits and losses accounts showed a special profit of slightly over 350 million yen, and a loss due to Minamata Disease Compensation Liabilities of a little over 5,250 million yen as well as an extra burden for pollution prevention costs of slightly over 1,370 million yen and a disposal cost of facilities for polyvinyl chloride of slightly over 650 million yen.

As a result, the report term closed regrettably with a loss of a little over 1,600 million yen.

The situation for the various business divisions can be summarized as follows:

Petrochemicals Division

The Petrochemicals Division was marked by the generally steady profile of the market. Although raw materials prices were in a high level, adjustments of product prices were not realized as a result of the competitive pressure of imported products, and the situation remained severe.

Domestic shipment volumes of polypropylene did increase owing to the contribution of extended sales of high performance polymers, strategic products. On the export side, shipment volumes decreased in the last half of the term due to the adverse development of the Asian market. Shipment volumes of organic chemicals had strong showing in ethyl acetate, acetic acid and polyvinyl formal, the shipment of oxo alcohol, however, was sluggish.

The Petrochemicals Division closed the report term with sales of slightly over 74,000 million yen at 7% below the previous term, due to a transfer of polyvinyl chloride business and a business transfer of plasticizer business to a joint-venture company.

Consumer-Oriented Goods Division

The Consumer-Oriented Goods Division has seen favorable signs of recovery in the domestic demand, but has not enjoyed full-scale recovery of demand.

In the fiber area, although competition with other materials has got more serious, and under severe conditions, sales figures were increased thanks to the market valuation to the performance and quality of the company's thermo-adhesive composite fiber (tradename "ES Fiber"). The spun-bond composite non-woven fiber also has enjoyed the increase of sales figures.

Although agrichemical products such as chemical fertilizers and agricultural PVC films has undergone a stagnant transition on the whole, due to a severe environment surrounding the agriculture, coated polyurea fertilizer (tradename "LP Coat") and "Strawberry High-Level Cultivation System" have showed the increase of sales figures as a result of extended sales promotion.

The Division has commenced selling the synthetic paper (tradename "CARRE"), and has succeeded in development of a high strength type. Its extended sale is expected.

The Consumer-Oriented Goods Division closed the report term with sales in excess of 18,350 million yen, a 10% below the previous tem, as a result of a transfer of overseas sales to a joint-venture company "ES Fiber Visions".

Performance Products Division

The Performance Products Division reported a big increase in the volume of shipments centering information technology-related industry in an expanded undertone of demand.

Liquid crystals marked favorable shipments for displays of personal computers and cellular phones with a big increase in the volume of shipments. Oriented films, liquid crystals-related materials, marked also a favorable increase in sales. An affiliate company Kumamoto Fine executes work for intensifying facilities for synthesizing liquid crystals following the previous term.

Electronic parts marked in turn a favorable development for liquid crystal displays with a big increase in sales amount. An affiliate company Sun Electronics conducted a work for intensifying performance to cope with the situation.

Fine chemical products marked a favorable development in the use of polylysine, natural preservative, except the food industry, and extended the volume of sales. Silicon compounds were marked by low profile of shipments for semiconductors, by high profile of shipments for optical fibers, synthetic quarts and coupling agents, and found a favorable development in the sales amount. In order to intensify competitiveness of the coupling agent (tradename "Sila-Ace") and to cope with the expansion of demand, an affiliated company Kumamoto Fine executed a work for intensifying its performance during the report term. Although synthetic preservatives marked a favorable volume of sales, the conditions surrounding the products remain severe due to the weakening of the world market.

Microbial detection sheets for detecting fungi (tradename "SANITA-KUN") used for food and environmental evaluation were launched on the market during the report term.

As a result, the Performance Products Division reported a sales amount of slightly over 40,100 million yen, at a level 2% below the previous term. Since organic synthesis-related products were placed under the control of the Petrochemicals Division from the report term, the Performance Products Division recorded an increase of 7% making allowance for this influence.