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SDK and Yasuda Agree to Cancel Toll Production Arrangement

April 16, 2004

Showa Denko K.K. (SDK) and Yasuda Kinzoku Kogyo Co., Ltd. (Yasuda) have agreed to cancel their plan for producing large-sized aluminum extrusions through a tolling arrangement.

Under the plan, a large press suspended since March 2003 at SDK’s Sakai Plant in Osaka was to be sold to Yasuda for operation at its original location. The period of relevant land/building lease was set at three years to allow for future expansion of the Sakai Plant.

However, Yasuda has come to judge that it will not be possible for the company to recover the expenses pertaining to the restart of the press within that time frame. SDK accepted Yasuda’s request for cancellation of the plan. Despite the cancellation, the two companies have confirmed their intention to maintain their friendly relations.

To meet growing demand for large-sized aluminum extrusions and to shorten delivery periods, SDK will continue full capacity operation at its Oyama Plant in Tochigi Prefecture with increased manpower. At the same time, utilization of a 3,250-ton press at SDK’s Hikone Plant in Shiga Prefecture will be stepped up. Through these measures, SDK intends to increase production of large-sized aluminum extrusions by around 10%.