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Laminate Businesses in SDK Group Consolidated

May 29, 2001

Showa Denko K.K. (SDK) and Heisei Polymer Co., Ltd. (Heisei) have decided to separate their respective fabricated foil and laminate businesses and transfer the businesses to Showa Laminating Industry Corporation, a wholly-owned subsidiary of SDK, effective October 1, 2001.

Showa Denko Group of companies have been providing a wide variety of packaging materials and containers to serve the electronics and personal care/environment-related markets that are defined as "target markets" under SDK's medium-term consolidated business plan.

This time, SDK's fabricated foil business (based on aluminum) and Heisei's laminate business (based on plastics) will be consolidated into Showa Laminating Industry Corporation. The step is intended as a measure to facilitate the development of high-performance, high-quality laminates through the fusion of organic and inorganic technologies.

Showa Laminating Industry Corporation, as a company exclusively engaged in laminating operations, will increase efficiency and improve profitability under the new setup.

Heisei will focus its resources on its competitive cloth and film operations. At the same time, Heisei is studying the possibility of acquiring the shares of Showa Denko Plastic Products Co., Ltd., whose operations are closely linked to those of Heisei.

Details of the transaction are as follows:

1. Transferred businesses

From SDK: All business pertaining to fabricated foil (excluding land and building)
From Heisei: Part of business pertaining to laminate (Manufacture and sale of laminate produced at Heisei's Nara Plant; Purchase and sale of laminate)

2. Annual sales of transferred businesses

SDK's fabricated foil business: ¥7,164 million
Heisei's laminate business: ¥4,060 million

3. Book value of transferred assets

SDK's fabricated foil business: ¥1,688 million
Heisei's laminate business: ¥2,513 million

4. Prices and payment

The amount of consideration will be decided through consultation and agreement. The amount will be a due price as of the date of business transfer. Parties will decide, through consultation, on the method of calculating the price, as well as the method and date of payment.

[Reference]

Showa Laminating Industry Corporation

Scope of business Manufacture and sale of packaging materials (based on metallic foil, paper and plastics) and industrial/construction/agricultural materials
Capital ¥200 million (owned 100% by SDK)
Head office 31, Suzukawa, Isehara City, Kanagawa Prefecture
Start-up date December 10, 1949
President Katsuhiko Kozano
Employees 51
[Performance forecast]

Heisei Polymer Co., Ltd.

Unit: Millions of yen (excluding dividend per share)
  FY 2001 (Ending March 2002) FY 2002 (Ending March 2003)
Sales 9,662 7,326
Operating profit -27 162
Ordinary profit -67 132
Net profit -368 52
Dividend per share 0 --

Showa Laminating Industry Corporation

Unit: Millions of yen (excluding dividend per share)
  FY 2001 (Ending March 2002) FY 2002 (Ending March 2003)
Sales 8,309 14,860
Operating profit 206 537
Ordinary profit 83 283
Net profit -23 183
Dividend per share 0 0