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SDK to Terminate Carbon Black Joint Venture with Cabot

September 21, 2005

Showa Denko K.K. (SDK) decided at its board meeting today to terminate the shareholders agreement with Cabot Corporation of USA (CABOT) concerning their 50/50 joint venture Showa Cabot K.K. (SCK).

SCK has been producing and marketing carbon black since July 1978 when the joint venture was formed. The company is one of SDK’s affiliates to which the equity method is applied.

SDK and CABOT today signed an agreement on termination of the shareholders agreement. The closing of the agreement is scheduled to take place on November 8, 2005.

Under the agreement, SCK will reduce its capital by way of its redemption of all of SDK’s owned shares of the common stock (1.8 million shares).

SDK has been preferentially allocating its resources to strategic growth businesses under the current three-year consolidated business plan, the Sprout Project, while CABOT is planning to further strengthen its core carbon black business. Thus, it has been agreed to amicably terminate the joint venture operation.

After the termination of the shareholders agreement, SCK will change its name to Cabot Japan KK, becoming a wholly owned subsidiary of CABOT.

This transaction will not materially affect SDK’s performances.

[Reference]

Outline of Showa Cabot K.K. (As of December 31, 2004)

Head office 7-3, Hamamatsu-cho 1-chome, Minato-ku, Tokyo
President Takeshi Mimura
Capital ¥1,800 million
Total assets ¥12,902 million
Annual sales ¥12,868 million (For the term ended December 31, 2004)
Shareholders Showa Denko K.K. (50%)
Cabot International Capital Corporation*  (50%)
* A wholly owned subsidiary of Cabot Corporation
Number of employees 128
Scope of business Production, marketing, export/import of carbon black
Production, marketing, export/import of other petrochemicals

Outline of Cabot Corporation (As of September 30, 2004)

Head office Two Seaport Lane, Boston, MA, USA
CEO Kennett F. Burnes
Annual sales $1,934 million (For the term ended September 30, 2004)
Stockholders’ equity $1,191 million
Scope of business Specialty chemicals