New plant to be constructed in Malaysia for production of polyimide film Capital investment of approximately 8 billion yen designed to expand and enhance competitiveness of business

Kaneka Corporation (Osaka, Japan; President: Kimikazu Sugawara) established a new company Kaneka Apical Malaysia Sdn. Bhd. in February of this year in the aims of expanding its polyimide film (“PI film”)*1 business and enhancing its competitiveness and began construction of a new plant on the premises of Kaneka Malaysia Sdn. Bhd. (Pahang, Malaysia; Managing Director: Masahiro Kozai). The new plant will primarily produce Apical NPI*2, a major grade of PI film, and will begin operations with an annual production capacity of approximately 600 tons in October 2013. This expansion will raise the total production capacity in Japan, the United States and Malaysia to 3,200 tons. Further capacity increases are planned by 2016, with a total investment amount of around 8 billion yen. PI film is used widely in flexible printed circuit boards (“FPC boards”), and this move is designed to meet the further increase in demand expected from the recent popularization of smartphones and tablet PCs. The reasons for building the new plant in Malaysia include (1) the trade advantages arising from the free trade agreements it has signed with Japan, China, South Korea, etc., (2) the stable supply of utilities and comparatively low procurement costs due to its position as a producer of natural gas and (3) the smaller amount of investment necessary as a result of constructing it on the already operational Kaneka Malaysia premises (and not having to acquire new land).

*1 Polyimide film is a highly functional film with superior heat and cold resistance properties. Flexible printed circuit boards account for around 70% of the demand, but it is also widely used for insulation in train motors and airplane wiring as well as in space equipment like information satellites.
*2 Since commercializing the PI business in 1984, Kaneka has focused on the FPC board field. Among the first companies to identify the trend towards fine pitch wiring, the company developed “Apical NPI” as a high dimensional stability grade product. It is currently the leading grade.

At the same time, the Shiga Plant in Japan, which is currently producing Apical NPI, will be converted into a production base for polyimide film (product name: Pixeo*3) for 2-layer flexible copper clad laminates and new high functional grades.

*3 Pixeo is a film that has adhesive layers of thermoplastic PI on either side of the core PI film and is used in 2-layer FPC boards. Compared to conventional 3-layer FPC boards, these boards are more reliable and have greater dimensional stability. Moreover, because they can be made thinner, demand is increasing rapidly, primarily for use in smartphones and tablet PCs. Made using a proprietary manufacturing method, Kaneka’s Pixeo is available in an extensive lineup and has received high marks in the market.

While expanding overseas production, the company will also be actively promoting globalization of development and sales operations. There is already a development and sales framework in place centering on the corporate facilities of Kaneka Trading (Shanghai) Co.,Ltd. (Shanghai, China; General Manager: Yoshihiro Takeda), Kaneka Taiwan Corporation (Taipei, Taiwan; President: Kenji Kurimoto) and Kaneka Korea Corporation (Seoul, South Korea; President: Yoshiki Takeoka). The PI film business will be expanded and made more competitive through the implementation of these measures.

Outline of the New Company

Company name	：Kaneka Apical Malaysia Sdn. Bhd.
Capital	：94 million Malaysian Ringgits
Business	：Manufacture and sale of electronic products
Established:	：February 2012
Head office	：Pahang, Malaysia
Representative	：Masahiro Kozai, Managing Director
Shareholder	：Kaneka Corporation (100%)