New Activated Carbon Plant in China New Activated Carbon Plant in China

In April, 2004, Kuraray Chemical's wholly owned subsidiary in China, Kuraray Chemical (Ningxia) Environmental Industry Co., Ltd. commenced the construction of a new plant in Shi Zui Shan, Guangxi Province, which is in China's Ningxia region, at a total construction cost of ¥400 million. Test operation was completed on July 28, and on September 8 the plant was brought into commercial operation. To start, the plant will operate at a production scale of 1,000 tons per year, and this will be increased to 2,000 tons per year by fiscal 2007, 3,000 tons per year by fiscal 2008, and 5,000 tons per year by fiscal 2009. Eventually, production of 10,000 tons per year is within view.

The new plant joins Kuraray Chemical's Tsurumi Plant (Bizen City, Okayama Prefecture, Japan) and its subsidiary Cenapro Chemical Corporation (Cebu City, Republic of the Philippines) as the Company's third activated carbon manufacturing base. Kuraray Chemical manufactures activated carbon from coconut shell, coal, and resin, but the new Chinese plant will specialize in manufacturing activated carbon from coal. The activated carbon produced there will be used for automobile canisters, industrial deodorizing equipment, dioxin filters, and similar applications. Initially, the plant's entire production will be exported to Japan and other countries, but Kuraray Chemical plans to market a portion in China in the future.

Outline of Kuraray Chemical (Ningxia) Environmental Industry Co., Ltd.

1. Location Da Wu Kou Industry Park, Shi Zui Shan, Guangxi Province, Ningxia, China
2. President Hitoaki Muratoh
3. Capital ¥400 million (Kuraray Chemical 100%)
4. Site area 100,000m²
5. Factory floor space 30,000m²
6. Principal facilities Activated carbon manufacturing equipment, electricity reception and transformer equipment, and exhaust gas treatment equipment
7. Number of employees Approximately 100
8. Business activities Manufacture of activated carbon from coal.

Outline of Kuraray Chemical Co., Ltd.

1. Headquarters 1-12-39, Umeda, Kita-ku, Osaka 530-8611, Japan (Shin-Hankyu Building)
2. President Shobu Minatono
3. Capital ¥600 million
4. Number of employees 216 (As of March 31, 2005)
5. Business activities Manufacture and sales of granulated activated carbon, fibrous activated carbon, molded activated carbon, sheets impregnated with activated carbon, and spherical superabsorbent resin granules; design, production and sales of nitrogen gas separator and activated carbon reprocessing kilns.