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SEC to Tie Up with Darco in Effluent Treatment Business in Asia

SHOWA ENGINEERING CO., LTD.
SHOWA DENKO K.K.
March 9, 2004

Showa Engineering Co., Ltd. (SEC), a consolidated subsidiary of Showa Denko K.K., has reached agreement with Darco Water Technologies Limited (Darco) of Singapore to jointly market SEC’s “UNOX System” effluent treatment facilities in Asia.

The UNOX System, commercialized in Japan by SEC since 1970, uses concentrated oxygen gas for aeration in activated sludge process equipment. More than 120 units of UNOX System facilities have been constructed in Japan.

Darco, established in 1999, has been engaged in a wide scope of water-treatment business based on its core technologies of membrane separation and ion exchange. The company has built more than 100 units of demineralizer and effluent treatment facilities in Singapore, Malaysia and other Southeast Asian countries.

Based on the agreement, SEC will provide Darco with relevant technology and guidance. The two companies will jointly market the UNOX System in Southeast Asia, Taiwan and China, providing design, manufacture, construction and maintenance.

In this alliance, Darco’s proprietary technologies and established network in Asia will be fully utilized. SEC is aiming to build up its UNOX System business in Asia and Darco is planning to expand its effluent treatment business by introducing new technology.

On the strength of this alliance, the two companies are planning to secure contracts for 15 or more water-treatment-facility projects by 2010.

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1. Outline of UNOX System

An effluent treatment system based on the activated sludge process that uses microorganisms. While ordinary process uses air for aeration, the UNOX System uses concentrated oxygen gas (normal concentration: 90%). As a result, the UNOX System enables reduction in the facility space, stable operation in spite of load fluctuations, substantial reduction in exhaust gas/odor, and easy operation/maintenance.

In Japan, the UNOX System has been adopted at more than 120 industrial effluent facilities for various plants, including paper mills, chemical plants and food processing plants. Due to the broad experience accumulated so far, SEC’s UNOX System can fully meet the environmental needs of the developing countries in Asia.

2. Profile of Showa Engineering Co., Ltd.

Head office 17-12, Shibaura 3-chome, Minato-ku, Tokyo
President Susumu Mitani
Established April 1964
Capital ¥470 million
Shareholder Showa Denko K.K. (100%)
Net sales ¥26.2 billion (Estimates for fiscal year ending in March 2004)
Scope of business Design, manufacture, construction and maintenance of environmental facilities and various plants
Employees 350

3. Profile of Darco Water Technologies Limited

Head office 41 Loyang Drive Singapore 508952
CEO Thye Kim Meng
Established October1999
Capital S$7,448,000
Stock Listed on the Singapore Stock Exchange (SESDAQ)
Net sales S$34,123,000 (consolidated sales for fiscal 2003)
Scope of business Design, manufacture, construction and maintenance of water treatment facilities
Employees 228