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For the 78th terms from April 1, 2001 through to March 31, 2002

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During the report term, the Japanese economy has been affected, under a persistent decline in prices, by the U.S. economic slowdown and the delayed restoration due to the September terrorist attacks. Economic downturns have been accentuated as seen in the decline of Japanese exportation, the reduction of equipment investments, and the depression of consumer spending, and so on.

The chemical industry has been affected by domestic and foreign downturns in the economy, both the conditions of the market and the shipment have developed sluggishly, thus has been under a difficult business environment.

Under these circumstances, Chisso Corporation has thoroughly increased the operational efficiency by cutting costs company-wide, and made a concentrated effort to enhance competitiveness and to secure profits while making every effort to keep up the sales.

However, the present term closed with a sales figure of slightly over 119,570 million yen at a level somewhat below the previous term, and with ordinary profits of slightly over 4,610 million yen.

The special profits and losses accounts showed a special profit of slightly over 3,050 million yen owing to the share sales of a subsidiary company Nihon Gravure Industry Co., Ltd., to promote a strategic business, and a loss due to Minamata Disease Compensation Liabilities of a little over 8,940 million yen. As a result, the report term closed regrettably with a loss of a little over 1,270 million yen.

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

Petrochemicals Division

The Petrochemicals Division was marked by such a difficult situation as the decline of products prices, although raw materials prices in a high level fell slightly in the later half of the term.

The prices of general-purpose polypropylene declined and shipment volumes were sluggish because of the slow economy and tough competition accompanied by the realignment of polyolefin industries. Under such circumstances, high performance polymers have favorably expanded markets specifically in the food packaging and automotive use. Regarding this business, the cooperation with Japan Polychem Corporation and the integration of the business of both companies are under being studied. It is confident that the cooperation of both companies having the established reputation in technologies will bring about synergistic effects.

Organic chemicals had a small increase of sales figure in ethyl acetate, the shipment volumes and prices of oxo alcohols and other products, however, were sluggish.

The Petrochemical Division closed the report term with sales of slightly over 67,410 million yen at a level below the previous term.

Consumer-Oriented Goods Division

The Consumer-Oriented Goods Division was under a severe business environment on the whole due to slack demand.

In the fibers area, sales figures in the main sanitary materials were affected by inexpensively imported non-woven fabrics and competitive materials. It is anticipated that such circumstances will continue in this area, so that applications other than in the sanitary area are under development.

Agrichemical products such as chemical fertilizers and agricultural materials showed a sluggish growth in shipment under a severe environment surrounding the agriculture seen in the increase of the imported agricultural products and the decrease in the rice acreage, and the conditions of market underwent a declined transition.

The polyolefin synthetic paper (tradename "CARRE") was appreciated for its beautiful printing finish and other quality characteristics, employed for the labels of food containers and for other uses, and the extension of the market is being promoted for posters and others.

As a result, the Consumer-Oriented Goods Division closed the report term with sales of slightly over 16,900 million yen at a level below the previous term.

Performance Products Division

The Performance Products Division was affected by a serious impact due to a sharp economic downturn in the information technology-related industry, and the business underwent a sluggish transition on the whole.

Orders for electronic components drastically declined, and plants are forced to reduce the operating factor. Through rationalization programs including personnel reduction was executed to cope with the situation. The shipment of silicon products declined considerably because of the stagnation of demand for semiconductors, optical fibers, and so on.

Under these severe circumstances, liquid crystals marked favorable shipments, favored with environmental changes such as the substitution of a liquid crystal display for a cathode-ray tube in the personal computer display, and prospective views on new demand areas developed by the liquid crystal display color televisions.

The fine chemical products marked a partial decline in the use of polylysine as a food preservative, measures to develop application other than the food preservative were conducted actively to cope with the situation. The sales figures of sorbic acid increased as a result of activities for price correction, and favored by the depreciation of yen.

Microbial detection sheets for detecting fungi (tradename "SANITA-KUN") used for food and environmental evaluation have a good reputation on the market, and active business operations are taken to expand sales.

As a result, the Performance Products Division closed the report term with sales of slightly over 35,250 million yen at a level far below the previous term.