Kuraray Co., Ltd. (hereafter "Kuraray" or "the Company") today announced its decision to assume a portion of the business of its wholly owned consolidated subsidiary, Kuraray Trading Co., Ltd. (hereafter "Kuraray Trading"), effective July 1, 2008, following a resolution of its Board of Directors at a meeting held on April 30, 2008. Brief details are as follows.

1. Reasons for Corporate Separation

Kuraray has decided to separate and assume the polyethylene terephthalate (PET) business from Kuraray Trading in order to enhance productivity and strengthen the competitiveness of the Group as a whole.

2. Overview of the Separation

(1) Schedule
Board of Directors meeting to approve the terms
and conditions of the corporate separation agreement
April 30, 2008
Execution of the corporate separation agreement May 1, 2008
Corporate separation date (effective date) July 1, 2008
Note: In accordance with the provisions of Articles 784-1 and 796-3 of the Corporation Law of Japan, Kuraray intends to separate a portion of the business of Kuraray Trading without obtaining approval at general meetings of shareholders of either company.
(2) Method of Separation
As the successor company, Kuraray will separate and assume a portion of the business of Kuraray Trading.
(3) Increase in Share Capital and Other Matters relating to the Separation
The separation of a portion of the business of Kuraray Trading does not entail an increase in share capital.
(4) Treatment of Kuraray New Share Issue Subscription Rights and Debt related to New Share Subscription Rights
There are no changes in the treatment of new share subscription rights with regard to corporate separation. Kuraray will not issue corporate debt with regard to new share subscription rights.
(5) Kuraray's Rights and Obligations as the Successor Company
On the corporate separation effective date, Kuraray will assume the following assets, liabilities, rights and other obligations pertaining to the business of Kuraray Trading: inventory, work-in-process and related trade accounts payable, processing fees payable and other obligations.
(6) Duties to be Performed
Kuraray and Kuraray Trading will decide on the respective duties to be borne by each company after corporate separation has been completed.

3. Overview of the Companies Affected by Corporate Separation

(1) Company name: Kuraray Co., Ltd. Kuraray Trading Co., Ltd.
(2) Business activities: Manufacture and sale of chemicals,resins, fibers, texttiles and related products Export, import, processing and sale of apparel-related products, fiber and textile materials and chemical-related products
(3) Date established: June 24, 1926 June 7, 1961
(4) Head office address: Sakazu 1621, Kurashiki City Okayama Prefecture 2-5-4 Hiranocho,Chuo-ku, Osaka
(5) Representative: Fumio Ito,Representative Director and President Tetsuzo Kimura President
(6) Paid-in capital: ¥88,955 million ¥2,200 million
(7) Shares issued: 382,863,603 334,000
(8) Net assets: ¥358,592 million (consolidated) ¥10,759 million (non-consolidated)
(9) Total assets: ¥508,694 million (consolidated) ¥46,989 million (non-consolidated)
(10) Financial year: March 31 March 31
(11) Employees 6,812 (consolidated) 336 (non-consolidated)
(12) Major shareholders /
percentage shareholding
Japan Trustee Service Bank, Ltd.6.22%;
The Master Trust Bank of Japan, Ltd. 6.12%
Kuraray Co., Ltd. 100%

(As of March 31, 2007)

4. Business being Assumed

(1) Business to be Assumed by Kuraray
The PET business
(2) Results of the Business to be Assumed
  Results of the Business to be Assumed for the Fiscal Year Ended March 31, 2007 (a) Kuraray Results for the Fiscal Year Ended March 31, 2007 (b) Percentage Share(a / b)
Net Sales ¥2,146 million ¥385,284 million 0.60%

(As of March 31, 2007)

(3) Type and Amount of Assets and Liabilities to be Assumed
Assets Liabilities
Item Book Value Item Book Value
Current Assets ¥321 million Current Liabilities ¥149 million
Fixed Assets ¥ - million Long-Term Liabilities ¥ - million
Total ¥321 million Total ¥149 million

(As of March 31, 2007)

5. Status of the Successor Company

(1) Company name Kuraray Co., Ltd.
(2) Business activities Manufacture and sale of chemicals and resins, fibers and textiles, and other products.
(3) Head office address Sakazu 1621, Kurashiki City, Okayama Prefecture
(4) Representative Fumio Ito, Representative Director and President
(5) Paid-in capital ¥88,955 million
(6) Financial year March 31
(7) Impact on business performance As the corporate separation and assumption of a portion of the business is being conducted between Kuraray and its wholly owned subsidiary, the Company does not expect any material impact on its consolidated and non-consolidated performance.