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SDK to Shift Roll-Bond Evaporator Production to Thailand

June 30, 2003

Showa Denko K.K. (SDK) will shift production of Roll-Bond evaporators from Oyama, Japan, to Thai Refrigeration Components Co., Ltd. (TRC)’s plant near Bangkok starting from July. Those evaporators are used in direct cooling, home-use refrigerators.

SDK’s Oyama Plant has produced more than 100 million units of RB evaporators in the past 40 years. The plant is now supplying RB evaporators mainly for the Southeast Asian market where demand for direct cooling refrigerators is growing fast. (Direct cooling refrigerators have RB evaporators inside. Until 1970 or so, refrigerators of this type were widely used in Japan as well.)

To cope with the start of overseas production by Japanese refrigerator manufacturers, SDK invested in TRC?an RB evaporator producing joint venture?when it was established in 1987 and provided technical assistance. SDK has been entrusting part of its RB evaporator production to TRC.

Currently, large-capacity home-use refrigerators marketed in Japan are indirect cooling refrigerators that do not use RB evaporators. Demand for RB products in Japan is limited to heat sinks and automotive sunshade panels.

Under the circumstances, SDK has decided to terminate RB evaporator production in Oyama at the end of this year and shift the production to TRC, which is located in the center of the market.

The Oyama Plant will receive RB products from TRC and, after finishing operations, supply them to Japanese customers. This setup will enhance SDK’s cost-competitiveness in RB operations, helping the company to expand its refrigerator evaporator business.

SDK is allocating a substantial portion of its resources to the heat exchanger business, which is defined as one of the strategic growth businesses under the ongoing medium-term consolidated business plan named the “Sprout Project.”

The company has established a global production system in this field to ensure close relationship with customers. Specifically, SDK is producing automotive heat exchangers in the United States, Thailand and the Czech Republic, while producing evaporators for refrigerators in Thailand, the Philippines and Indonesia. In both areas, SDK is utilizing its proprietary technologies.

In the Philippines, we are producing evaporators for CFC-free, large-capacity refrigerators for major Japanese manufacturers, as well as evaporators for refrigerator manufacturers in Australia and Southeast Asian countries.

SDK expects its sales of evaporators for refrigerators in 2005 will amount to ¥3.6 billion.

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Profile of Thai Refrigeration Components Co., Ltd. (TRC)

Establishment September 1987
Capital 50 million baht (approx. ¥150 million)
Location Bangpoo Industrial Estate, near Bangkok, Thailand
Ownership Owned 30% by Japanese shareholders (Showa Denko: 25%)
Owned 70% by Thai shareholders, centering on subsidiaries in Thailand of Japanese refrigerator manufacturers
President Mr. Suttipong Sriakachan
Executive Vice President Mr. Yuji Hasegawa (seconded from Showa Denko)
Number of employees 140 (including two Japanese)
Sales results in 2002 323 million baht (approx. ¥940 million); sold 1,791,000 units of RB evaporators