Kuraray Co., Ltd. (the "Company") announces that its Board of Directors passed a resolution for the dissolution of the equity-method affiliate Nihonkai Acetylene Co., Ltd. in a meeting held on March 28, 2008. Brief details are as follows.

1. Reason for Dissolution

The Company manufactures synthetic aroma chemicals and other products at its Niigata Plant, for which Nihonkai Acetylene supplies raw materials. Due to the deteriorating profitability of the aroma chemical business, however, the Company has decided to discontinue these manufacturing operations on March 31, 2008. Because of this, the raw material production volume at Nihonkai Acetylene will be significantly reduced and this, in turn, will make the affiliate's continued operation untenable. Therefore, the Company has reached the decision to discontinue the affiliate's operations and dissolve the affiliate.

2. Summary of the Affiliate

Company name Nihonkai Acetylene. Co., Ltd.
Headquarters 1-1-3 Otemachi, Chiyoda-ku, Tokyo
Representative Takaaki Fukumori, Director and President
Established March 7, 1978
Capital ¥60 million
Principal businesses Manufacture and sale of acetylene and byproduct calcium hydroxide
Major shareholders Kuraray Co., Ltd. 54.2%;
Toho Acetylene Co., Ltd. 41.7%;
Toho Niigata Co., Ltd. 4.1%

3. Planned Schedule

April 2008 Resolution for dissolution at Nihonkai Acetylene's Board of Directors meeting
May 2008 Commencement of liquidation process

4. Effect on the Company's Performance

The Company expects the dissolution to have no material effect on its consolidated or non-consolidated performances.