ZEON Corporation (President: Katsuhiko Nakano) reached a basic agreement to purchase the acrylonitrile butadiene rubber (NBR) business of DSM Copolymer, Inc. (President: Larry Powell). The deal was negotiated through ZEON Chemicals, Inc. (ZCI), ZEON's wholly-owned subsidiary in U.S.A. The transfer will take place at the end of January 1999. NBR is an oil-resistant rubber material mainly used for the components of automobile engines.

With this acquisition, ZCI will directly buy out DSM Copolymer's NBR business. The agreement includes rights to sales of approximately 10,000 tons per year and production of 16,000 tons per year of consecutive polymerization NBR at DSM Copolymer's Louisiana facility.

This acquisition increases the company's North American market share of NBR to 37 from 27 percent and solidifies its No. 1 position in the American market, taking a big lead over second-place Goodyear Co., Ltd., which has a 20 percent share. In the worldwide market, ZEON increases its market share by 5 points to 33 percent, taking a big lead over second-place Bayer of Germany, which has a 21 percent share.

ZEON believes that within our core C4 business, the special rubber business will best support our company in the 21st Century. We have worked to establish our position in the worldwide specialty rubber business based on a policy of making our strengths even stronger. This acquisition follows on our purchase of the acrylic rubber business of Enicem Co., Ltd. of Italy last summer, and enhances our position as a leader in the special oil-resistant rubber industry. To ensure our ability to generate a reasonable profit in the future, we feel it is necessary to establish an overwhelming position in each special rubber product category, including NBR, acrylic rubber, hydrine rubber, hydrogenated NBR and other products.

We will continue to work to become the global leader in the oil-resistant special rubber business, gaining the trust of our customers and firmly establishing our position as the world's No. 1 supplier.

1.	Background and history
	ZEON Corporation (President: Katsuhiko Nakano) reached a basic agreement to purchase the acrylonitrile butadiene rubber (NBR) business of DSM Copolymer, Inc. (President: Larry Powell). The deal was negotiated through ZEON Chemicals, Inc. (ZCI), ZEON's wholly-owned subsidiary in U.S.A. The transfer will take place at the end of January 1999. NBR is an oil-resistant rubber material mainly used for the components of automobile engines. With this acquisition, ZCI will directly buy out DSM Copolymer's NBR business. The agreement includes rights to sales of approximately 10,000 tons per year and production of 16,000 tons per year of consecutive polymerization NBR at DSM Copolymer's Louisiana facility. This acquisition increases the company's North American market share of NBR to 37 from 27 percent and solidifies its No. 1 position in the American market, taking a big lead over second-place Goodyear Co., Ltd., which has a 20 percent share. In the worldwide market, ZEON increases its market share by 5 points to 33 percent, taking a big lead over second-place Bayer of Germany, which has a 21 percent share. ZEON believes that within our core C4 business, the special rubber business will best support our company in the 21st Century. We have worked to establish our position in the worldwide specialty rubber business based on a policy of making our strengths even stronger. This acquisition follows on our purchase of the acrylic rubber business of Enicem Co., Ltd. of Italy last summer, and enhances our position as a leader in the special oil-resistant rubber industry. To ensure our ability to generate a reasonable profit in the future, we feel it is necessary to establish an overwhelming position in each special rubber product category, including NBR, acrylic rubber, hydrine rubber, hydrogenated NBR and other products. We will continue to work to become the global leader in the oil-resistant special rubber business, gaining the trust of our customers and firmly establishing our position as the world's No. 1 supplier.
2.	Future of American NBR market
	Uniroyal of America announced that it would shut down its 20,000-ton NBR production facility in Ohio in 1999 and open a new facility in Mexico with an annual production capacity of 40,000 tons in cooperation with Industrias Negromex. Along with ZCI, Uniroyal is a manufacturer of batch-polymerizing NBR. However, with the new Mexican facility the company will exclusively produce consecutive-polymerizing NBR. ZCI, therefore, will become the only company to supply batch-polymerizing products, and we expect to win over many of Uniroyal's former customers. In addition, DSM Copolymer facility has a 16,000-ton consecutive-polymerizing capacity. ZCI will be able to compete even more aggressively in the general-use NBR market, a market in which cost effectiveness is essential. The ZEON group's acquisition of DSM Copolymer's NBR business and Uniroyal's withdrawal from the United States to Mexico will refresh the power balance among American NBR manufacturers. A market that is currently dominated by five companies will become one controlled by three major companies: ZCI, Goodyear and Bayer.
3.	DSM Copolymer Co., Ltd.
	DSM Copolymer, a wholly-owned subsidiary of DSM Elastomer Co., Ltd., is part of the DSM Group headquartered in the Netherlands. The company is attempting to build its synthetic rubber business in North America with a focus on conventional products like EPDM, SBR and NBR. With this agreement, DSM appears to be concentrating on its EPDM production business, a field in which DSM is already a world leader.
4.	Reference: ZEON's global share of oil-resistant special rubber products (after acquisition):
	Global Japan N. America EU Other (1) NBR 33% 55% 37% 20% 27% (2) Acrylic Rubber 54% - - - - (3) Hydrine Rubber 76% - - - - (4) Hydrogenated NBR 75% - - - -