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Mitsui to Participate in Rubber Tree Planting and Rubber Block Processing and Exporting Business in Cambodia

Jan. 13, 2015


Main Contents

Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President and CEO: Masami Iijima) and Mak Kim Hong Group Co., Ltd. ("MKH-G"), a Cambodia-based company owned by Mr. Mak Kim Hong, jointly established Japan (Cambodia) Tropical Plantation Partners Co., Ltd. ("JCTPP") in April 2013 as a research company. Mitsui and MKH-G have now agreed to restructure JCTPP as a Cambodia-based business corporation specializing in rubber tree planting and rubber block processing and exporting ("the Business"). Mr. Mak Kim Hong, the owner of MKH-G, has business interests that include rubber tree planting, rubber processing, and rice milling in Cambodia.

Demand for rubber blocks, which are produced by processing natural rubber, is expected to increase by around 4-5% annually, reflecting increased demand for motor vehicles in emerging markets, such as China and India. However, rubber tree planting and rubber block processing are labor-intensive activities, and rising labor costs in Thailand, Malaysia and Indonesia, which are the main producers of rubber blocks, are reflected in increased production costs. This change in the business environment is expected to result in the emergence of Indochinese countries, such as Laos and Myanmar, and in particular Cambodia, among the world's main rubber block production centers.

As a business corporation, JCTPP will acquire usage rights for approximately 10,000 hectares of land leased from the government in the central province of Kampong Thom. After developing extensive rubber plantations, it will eventually build a rubber block processing plant and establish a value chain encompassing plantation operation, rubber processing and exporting.

Since 1995 Mitsui has been involved in the development of forest plantations in Australia to provide resources for paper manufacturing. In addition to expertise accumulated through that activity, Mitsui also has global marketing capabilities based on its existing business relationships. It plans to use these strengths to sell rubber blocks directly to tire manufacturers and other users.

The Business will also be highly significant from a social perspective because of the potential to contribute to economic development, the improvement of living standards and job creation in Cambodia. Care will be taken to achieve harmonious coexistence with the environment and local communities. In the longer-term future, Mitsui hopes to establish similar projects in neighboring countries on the Indochinese peninsula, including Myanmar and Laos.

Mitsui plans to obtain overseas investment insurance from Nippon Export and Investment Insurance (NEXI) to cover the risks of expropriation, rights violations, war, force majeure and the inability to remit funds.

Profile of JCTPP

Name of Company Japan (Cambodia) Tropical Plantation Partners Co., Ltd.
Head Office Phnom Penh, Kingdom of Cambodia
Establishment April 2013
Representative Norng Veasna (CEO)
Shareholders Mitsui: 49%, MKH-G: 51%
Business activities Rubber tree planting, rubber block processing and exporting

Photo Captions

1. A rubber plantation

A rubber plantation

2. Tapping

Tapping

3. Latex

Latex

* Tapping is a technique whereby liquid latex emulsion is extracted into a container via cuts made in the trunk of a rubber tree.

4. Rubber block processing

Rubber block processing

5. Finished products

Finished products

Map

Map

Notice:
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Corporate Communications Division
Tomomi Taura
Telephone: +81-3-3285-6645
Facsimile: +81-3-3285-9819