Asahi Glass Co., Ltd. (Tokyo, President:Hiromichi Seya) reached an agreement in principle to form a joint venture with AlliedSignal Inc. (Morris Township, New Jersey, Chairman: Lawrence A. Bossidy) in Japan by the second quarter of this year, concerning the business of non-ozone-depleting fluorocarbon products used for air-conditioning, commercial refrigeration and foam-insulation applications in Japan and to select Asian customers.

As a developed nation signatory to the Montreal Protocol on Substances that Deplete the Ozone Layer, Japan ceased production of CFCs on December 31, 1995. The use of HCFCs, which are CFC substitutes, also started to be controlled from 1996, and is scheduled to be limited to refilling purpose for existing air-conditioning equipment from 2010 and abolished totally by 2020. In view of such schedule, the replacement by HFC, non-ozone-depleting fluorocarbon products, has been studied seriously in related industries in recent years.

AlliedSignal, who owns the patents of HFC410A and has developed technology for 245fa, has been studying to choose a possible partner in Japan where the replacement has already been studied and in other Asian market which is expected to grow in the future, in support of its globalization strategy of the products.

Asahi Glass, who has actively developed HCFC and HFC products, is one of the leading companies in the global market of these products. For example, Asahi Glass successfully developed and marketed HCFC-225, the substitute for CFC-113 to be used for solvents which is in the greatest demand in fluorocarbon products, in advance of any other companies in the world.

AlliedSignal has chosen Asahi Glass as a partner of the joint venture to work together in fluorocarbon business, acknowledging Asahi Glass's potential in terms of marketing and technology including patents.

The products to be marketed by the joint venture will be all non-ozone-depleting HFCs as shown below.

• HFC-410A, HFC-407C
  (Substitutes for HCFC-22,for air-conditioning and commercial refrigeration)

• HFC-404A, HFC-507
  (Substitutes for CFC-502,for refrigeration of commercial refrigerated showcases and vehicles)

• HFC-245fa
  (Substitutes for HCFC-141b,for foam-insulation application such as polyurethane)

The joint venture to be established by both companies in Japan will initially conduct the market development and technical services in the said area, while HFC-410A and 245fa will be imported from AlliedSignal, and other products will be produced by Asahi Glass; however, all the products will be sold by Asahi Glass. The companies plan to cause the joint venture to build the production facilities of HFC-410A over the next two to three years and that of 245fa later on in Japan, based on the projected growth of the market.

The following will be the outline of the joint venture company.

• Equity capital at the time of incorporation will be 20,000,000 yen.
• The joint venture may rent its office in the office either of the companies in Japan.
• Equity ratio will be initially AlliedSignal: 51% and Asahi Glass: 49%, and 50:50 after the start of the production in Japan.

The name, personnel and other details of the joint venture have yet to be finalized by the companies.

END

References

1. AlliedSignal Inc.

2. AlliedSignal Inc. Japan