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SHP Becomes SDK's Consolidated Subsidiary

May 25, 2001

Showa Denko K.K. (SDK) has decided to consolidate Showa Highpolymer Co., Ltd. (SHP), so far a non-consolidated affiliate to which the equity method was applied.

SDK has purchased additional shares in SHP, which is listed on the Tokyo Stock Exchange in its First Section under the code number of 4214, and made SHP a consolidated subsidiary according to the "actual control" standard in the regulations on financial statements.

SDK has taken this step in order to improve the Group's competitive position by integrating SHP's plastic materials and processing technology with SDK's various materials, including specialty chemicals.

SHP's consolidation will be reflected in SDK's interim balance sheet as at the end of June 2001 and in its statement of income as from the second half (July through December) of 2001. Following this, SDK's consolidated sales, operating profit and ordinary profit for 2001 will increase ¥13,300 million, ¥700 million, and ¥400 million, respectively.

[Profile of SHP]

Head office: 3-20, Kanda-Nishiki-cho, Chiyoda-ku, Tokyo
Capital: ¥10,950 million
Total number of shares outstanding: 54,435 thousand
Number of shares owned by SDK: 21,789 thousand
SDK's equity ratio: 40.03% (including shares owned by SDK's subsidiary)
President: Toshio Yamamura
Scope of business:
 Manufacture of various plastic resins and fabrications
 Execution of construction work in which plastic materials are used
 Resale of plastic compounds, molded products and zipped plastic bags