Coal

Sanix Inc. sets up subsidiary to handle power generation from plastic

Fukuoka, Japan, October 9, 2001 — SANIX Inc. announced the establishment of a new subsidiary, SANIX ENERGY Inc., which will be responsible for Sanix’s waste recycling and power generation operations.

The unit will be created after being spun off from Sanix’s Resource Recycling Power Generation Business, according to a decision taken at the board of directors’ meeting, September 26, 2001.

SANIX ENERGY will operate the Tomakomai power plant in Hokkaido, northern Japan, which runs on fuel created from recycled plastic waste. The plant will be completed in May 2002 and SANIX ENERGY will sell the resultant electric power to retail customers from August 2002.

The plant operates at more than 850 degrees Celsius, generating energy from the naturally high calorific content of plastic and producing 74,000 kilowatts of electricity an hour, enough to power about 30,000 homes. Building on the success of the first venture, the company has plans to increase the number of similar power generation plants across Japan.

The recycled plastic is supplied by SANIX’s Environmental Resources Development Division, which operates 11 plastic recycling plants across Japan that convert waste plastics into fuel. The division is currently constructing three more recycling plants.

SANIX ENERGY will specialize in generating and selling power from waste plastic with an aim to becoming the company in the environmental energy business.

The new company will actively seek out capital and business tie-ups with third parties possessing essential technology and know-how in the power generation field. Management of the newly established power generation company will aim to maintain flexible strategies, by which they can act promptly in response to further worsening environmental problems as well as accelerated competition in the power generation business.

Social Value of Waste Plastic Power Generation According to a Plastic Waste Management Institute survey, waste plastic disposal totaled 9.84 million tons (4.85 million tons from industrial sources, 4.99 million tons from household use) in 1998. Management at Sanix Inc. was convinced that this plastic waste could be used as a recycled resource and pursued the project fervently.

By using waste plastic, which would previously have been simply buried or incinerated, the company contributes to an extension of the remaining life of landfill sites and prevents dioxin pollution generated by inappropriate incineration. The recycling process also contributes to society by providing local retailers with low-cost, safe, electric power.

SANIX ENERGY hopes to contribute to a reduction in the total volume of coal and other fossil fuels burned for electricity purposes. These are presently the sources of electric power generation in Japan, and a contributor to global warming.

Prospect in FY2002 The Tomakomai plant goes on-line from August 2002. SANIX ENERGY expects to generate sales from the fiscal year ending March 2003.