New Company to integrate Liquefied Petroleum Gas Operation
January 30, 2009
The JAPAN ENERGY CORPORATION ("J Energy"), ITOCHU Corporation ("ITOCHU"), ITOCHU ENEX CO., LTD ("Enex"), OSAKA GAS CO., LTD. ("Osaka Gas"), and NISSHO PETROLEUM GAS CORPORATION ("Nissho") started the investigation designed to restructure and merge Liquid Petroleum Gas ("LPG") operations on February 2008 and reached the basic agreement to establish of a new company to merge the functions of import and wholesales on October 2008. The company profiles have been decided as follows;
1. Overview of the integrated new company
| (1) Company name | Japan Gas Energy Corporation (JGE) |
|---|---|
| (2) Head Office | Minato-Ku Tokyo |
| (3) President | Junichi Izumi (current General Manager LPGas Dept. of Japan Energy Corp.) |
| (4) Paid-in Capital | 3.5 billion yen (0.5 billion yen of initial paid-in capital will be increased to 3.5 billion yen in April) |
| (5) Incorporated | April 1st , 2009 |
| (6) Share holders | J Energy 51% Nissho 29% Enex 20% (after increased) |
| (7) Business Activities | Import LPG, Sales (wholesales) |
| (8) Sales Amounts | approx. 160 billion yen (annual) |
| (9) Import Volume | 1.5 million tons (annual) |
| (10) Sales Volume | 2.25 million tons (annual) |
| (11) Branch/Office | 4 Branches / 3 Offices
|
2. Background and Objective of the Business Integration
The Japanese LPG industry is currently in a difficult business environment due to rising prices of LPG imports and sluggish growth prospects caused by fierce competition with other energy sources. The five concerned parties, having mutual conclusion that individual efforts to streamline operations are insufficient for weathering the difficult situation and, with a view across the entire range of LPG operations from overseas procurement to retail sales, have investigated the scheme of alliance.
The five parties intending to create an LPG business group which will be capable of efficiently providing a stable supply of LPG products with a comprehensive competitive edge which will be capable of efficiently providing a stable supply of LPG products, as the 1st step, integrate and unify the range of LPG operations from procurement to whole sales.
3. Outline and Method of Business Integration
J Energy's and Nissho's business of import and wholesales and Enex's business of lorry- wholesales will be integrated into the new company as follows. And, the LPG overseas procurement functionality of each company will be unified to Itochu.
- J Energy and Nissho will separate each running business of LPG import and wholesales on April 1st 2009 and transfer them to new established company JGE
- Enex will transfer its and its subsidiaries' running business of lorry-wholesales to JGE.
- JGE will allocate new shares to Enex as the 3rd party in this April and Enex, accepting the allocation , will participate in the capitals of JGE
4. Meanings of the name of the Company
The name of the new Company “Japan Gas Energy” expresses our spirit to play a role in Energy security as “A gaseous energy company representing Japan”, and our hope to be an energetic company with a comprehensive competitive edge.