A chemical company providing new values through innovative technologies. Code: M h 2012 March 2012 Investor & Public Relations Dept.

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1 A chemical company providing new values through innovative technologies Code: 4114 M h 2012 March 2012 Investor & Public Relations Dept.

2 Contents 1. Introduction 2. NIPPON SHOKUBAI Who we are 3. Main Business 4. New Business 5. Development of New Technologies 6. Return Policy Explanation of acronyms SAP: Superabsorbent Polymers AA: Acrylic Acid AES: Acrylates EO: Ethylene Oxide EG: Ethylene Glycol NAII: NA Industries, Inc. (USA) NSI: PT.NIPPON SHOKUBAI INDONESIA (Indonesia) Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 2

3 1. Introduction Age of Functional Chemicals Japanese Functional Chemicals: Hold major share of world market Japanese companies hold a far larger share of the global functional chemicals market than they do the automotive, electronics, and electronic parts markets. Lead the world in innovation Advances in functional chemicals brings about innovation at manufacturers of assembled products (automobiles and electronics) Support industry and lifestyles worldwide Functional chemicals are fundamental materials for all manufacturing and constitute a vital part of everyday life. Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 3

4 1. Introduction Nippon Shokubai Nippon Shokubai Products and Technology: Hold major share of world market Superabsorbent Polymers (SAP): Top share of global market (more than 25%) Acrylic Acid: Nippon Shokubai technology supports approximately half of the world s production Lead the world in innovation The permeability of SAP helps make disposable diapers thinner. Electronics and information materials help make displays thinner and enable high definition properties. Support industry and lifestyles worldwide Demand in a wide range of sectors stabilizes sales performance. High proportion used for manufacturing of daily necessities, making demand less vulnerable to economic downturn. Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 4

2. NIPPON SHOKUBAI - Who we are Results FY 3/2011 Record in income Growth reflects demand FY 3/2012 New record in income from emerging markets in Asia and other regions Fully prepared for increase in

5 2. NIPPON SHOKUBAI - Who we are Results FY 3/2011 Record in income Growth reflects demand FY 3/2012 New record in income from emerging markets in Asia and other regions Fully prepared for increase in demand following Lehman shock due to timely increase in capacity (Date) (Product) (Capacity Increase) (NS Global Capacity) Feb Ethylene Oxide +70,000 (Kawasaki) 324,000 tons/year Apr Acrylic Acid +80,000 (Himeji) 620,000 tons/year Oct SAP +60,000 (Himeji) 470,000 tons/year (100 million yen) 3,500 3,000 Ordinary Income Sales First half: Price of raw materials surges Second half: Demand drops sharply Major loss from revised inventory valuation 2, ,000 1, Across-the-board cost cutting while maintaining employment 1, (projections) 50 0 Increase supported by rise in capital investment Upturn in product market conditions Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 5

2. NIPPON SHOKUBAI - Who we are Raw Materials to Final Product Flowchart -Major Products Petroleum Ethylene Naphtha Propylene Ethylene oxide Basic chemicals Acrylic Acid Ethylene glycols Acrylates

6 2. NIPPON SHOKUBAI - Who we are Raw Materials to Final Product Flowchart -Major Products Petroleum Ethylene Naphtha Propylene Ethylene oxide Basic chemicals Acrylic Acid Ethylene glycols Acrylates Carboxylic acid polymers Functional chemicals E&I materials Specialty acrylates Polymer for paints, adhesive s, and tackifiers Superabsorbent polymer Automotive catalysts Process catalysts Environment& catalysts Zirconia sheet Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 6

7 2. NIPPON SHOKUBAI - Who we are Sales Ratio by Business Segment FY3/2011 Basic chemicals Environment & catalyst Functional chemicals 8% 43% 49% Core business Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 7

8 2. NIPPON SHOKUBAI - Who we are Company Outline Established August 1941 Common stock Net sales 25,038 million yen (As of March 31, 2011) 288,345 million yen (Consolidated Statements, FY3/2011) Number of employees 3,576 Stock listings (Consolidated Statements, FY3/2011) Tokyo Stock Exchange, First Section Osaka Securities Exchange, First Section Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 8

9 2. NIPPON SHOKUBAI - Who we are History Opened Suita Plant 1949 Renamed Nippon Shokubai Kagaku Kogyo Co., Ltd Opened Kawasaki Plant (the present Chidori Plant of the Kawasaki Plants) 1960 Opened Himeji Plant (the present Himeji Plant) 1967 Opened Kawasaki Second Plant (the present Ukishima Plant of the Kawasaki Plants) Established NA Industries, Inc. Tennessee, 1988 (5) Global expansion begins USA Renamed NIPPON SHOKUBAI Co., Ltd. <Technological Innovation> (1) Founding This year marks 71 st anniversary 1941 Succeeded in first commercial production of 1996 Established PT. Nisshoku Tripolyta Acrylindo in Indonesia (the present PT. NIPPON SHOKUBAI INDONESIA) Established NIPPON SHOKUBAI ASIA PTE 1998 LTD. in Singapore 1999 Established NIPPON SHOKUBAI EUROPE N.V. in Belgium 2003 Established NISSHOKU CHEMICAL INDUSTRY CO., LTD. in China 2004 Established SINGAPORE ACRYLIC PTE LTD. & SINGAPORE GLACIAL ACRYLIC PTE LTD. in 1941 Succeeded in first commercial production of phthalic anhydride in Japan Succeeded in mass production of maleic anhydride by oxidation of benzol (2)EO -50 years since commercialization Added to strategic products Commercialized production of ethylene oxide for the first time in Japan with our own technology. (3) AA/AES -Core products for 40 years 1983 (4) SAP - Primary core products for 30 years 1987 Started production of polymers for concrete admixture 1997 Started production of dioxins decomposition catalysts (6) Electronics and information materials business takes root 2000 Started production of functional dyes. Singapore 2006 Started production of acrylic resins for optical 2008 Acquisition of the major shares of NIPPON materials NYUKAZAI Co., LTD. and SINO-JAPAN CHEMICAL Co., Ltd. Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 9

2003: Member of the Board of Directors; 2006: Managing Director; 2009: Senior Managing Director; 2010: Executive

Primarily engaged in corporate planning.

Leveraged extensive experience in general business operations to contribute to the ongoing g success of the

10 2. NIPPON SHOKUBAI - Who we are Management Profile Masanori Ikeda President Graduated from Tokyo University, received an MBA from Cornell University. 2003: Member of the Board of Directors; 2006: Managing Director; 2009: Senior Managing Director; 2010: Executive Vice President Led many overseas projects, including NAII. Played an important role in our global expansion. Primarily engaged in corporate planning. Demonstrated abilities in implementing ERP (integrated enterprise system) and acquiring Nippon Nyukazai, etc. Leveraged extensive experience in general business operations to contribute to the ongoing g success of the company. Continuing the present course. Aims to achieve not only the numerical targets of TechnoAmenity 2015, but also the substance. Seeks the full confidence of stakeholders through robust CSR activities. Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 10

11 2. NIPPON SHOKUBAI - Who we are Long-term Business Plan TechnoAmenity 2015 Slogan: Challenge to the future, make dreams come true Corporate Philosophy Providing affluence and comfort to people and society, with our unique technology Management Philosophy Based upon a deep respect for humanity Coexisting with society, and working in harmony with the environment Pursuing innovative technology Operating on the global stage Vision A chemical company providing new values through h innovative technologies Six-Year Business Plan Undertake steady global expansion of AA/SAP Improve profitability of current products (Profitability Improvement Committee) Get new businesses (materials for E&I, new energy, batteries) on track 11

12 2. NIPPON SHOKUBAI - Who we are TechnoAmenity 2015 Business Portfolio Vision/Target for Business Portfolio FY2025 E&I New Current Health, Materials Energy Business Medical Level to attain in FY2015 Make one of the Fuel cell Improve Medical materials profitability materials centerpieces of profit generation Sales Sales 30 billion 5 billion Profitability Improvement committee Functional food materials Now Technology-related green chemistry, environmental protection and evaluation Catalyst, organic synthesis, polymer composition and production technologies Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 12

13 2. Main Business Acrylic acid/superabsorbent polymer Propylene Acrylic acid Basic chemicals Direct acrylic acid sales Acrylates Functional chemicals Superabsorbent polymer etc. Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 13

14 2. Main Business Global Expansion of SAP Leading Manufacturer Worldwide Superabsorbent polymer (SAP) * Major application: Disposable diapers *P Powdered dpolymer, the principal i raw material lbeing acrylic acid. A single gram of this polymer is able to absorb as much as 1,000 grams of liquid. 14

15 2. Main Business Global Expansion of SAP Much Hoped-for Application: Preventing Desertification 15

2. Main Business Global Expansion of SAP Supply and Demand Trends Demand Strong growth expected in line with economic growth in developing countries Global demand: approx. 1.

16 2. Main Business Global Expansion of SAP Supply and Demand Trends Demand Strong growth expected in line with economic growth in developing countries Global demand: approx. 1.7 million tons (2010 estimate) 7 to 8% annual growth Supply Emerging manufacturers, besides current majors, are planning to enter and expand SAP businsess Reinforcement of Nippon Shokubai Facilities October 2010 Himeji: 60,000 t/year In operation June 2012 America: 60,000 t/year Build & scrap August 2013 Indonesia: 90,000 t/year Scheduled July 2014 China: 30, t/year Scheduled Progressing as planned 16

2. Main Business Global Expansion of SAP Maintain the Top-Class Market Share and Ensure Profitability The Basis of Nippon Shokubai s SAP Strength

in Japan, US, Europe and China 4) Intellectual property strategy to maintain effectiveness of technology 5) Excellent customers with strong growth

products General cost reductions through process innovation including AA, production efficiency, and streamlined logistics Proper implementation

17 2. Main Business Global Expansion of SAP Maintain the Top-Class Market Share and Ensure Profitability The Basis of Nippon Shokubai s SAP Strength 1) R&D strength in products and processes 2) Integrated production from raw materials, AA 3) Stable supply network based on production facilities in Japan, US, Europe and China 4) Intellectual property strategy to maintain effectiveness of technology 5) Excellent customers with strong growth Risks and Countermeasures 1) New entrant products in developing countries gathering strength Differentiation through performance and quality of products General cost reductions through process innovation including AA, production efficiency, and streamlined logistics Proper implementation of intellectual property strategy 2) Reduced price competitiveness due to strong yen Increase production at facilities with less risk from strong yen 17

18 2. Main Business Global Expansion of AA Major Applications Paints (Acrylates) Adhesives and tackifiers (Acrylates) Printing ink (Acrylates) Diapers (AQUALIC CA) Water retaining agent for horticulture (ACRYHOPE) Car paints (Specialty acrylates, specialty methacrylates) 18

5,140 5,270 5,850 6,240 Nominal operating rate (A/B) 77% 79% 74% 73% Growth based on increased demand (Kt) Reinforcement of Nippon Shokubai Facilities April 2010 Himeji: 80,000 t/year-in

19 2. Main Business 5 to 6% annual growth Global Expansion of AA Supply and Demand Trends Global demand approx. 4 million tons (2010 estimate) Easing of supply and demand is expected in the mid-term Calender year Demand (A) 3,960 4,150 4,340 4,550 Annual available supply (B) 5,140 5,270 5,850 6,240 Nominal operating rate (A/B) 77% 79% 74% 73% Growth based on increased demand (Kt) Reinforcement of Nippon Shokubai Facilities April 2010 Himeji: 80,000 t/year-in operation August 2013 Himeji: 80,000 t/year-scheduled August 2013 Indonesia: 80,000 t/year-scheduled Progressing as planned The majority of Shokubai s expanded AA facilities are used for internal use for SAP production and external sales to the other SAP producers. 19

20 2. Main Business AA/SAP: Global Expansion to End of 2014 AA facilities (Kt/y) SAP facilities (Kt/y) Belgium (Antwerp) 60 China (Zhangjiagang) Singapore (Jurong Island) Japan (Himeji) U.S. (Houston) Indonesia (Cilegon) Production capacity (Kt/y) Current End of 2014 AA SAP

21 2. Main Business AA/SAP: Our Positioning (End of 2010) AA Production Capacity Worldwide total: Over 5 million tons Kt/y 1,500 1, Kt/y (End of 2013) SAP Production Capacity Worldwide total: Over 1.7million tons 590Kt/y (End of 2014) 600 Kt/y A B Nippon Shokubai C D Others 0 Nippon Shokubai A B C D Others Nippon Shokubai Estimate 21

22 2. Main Business Ethylene Oxide Ethylene Ethylene oxide Basic Chemicals Direct ethylene oxide sales Ethylene glycol Ethanolamine Higher alcohols Functional Chemicals Polymers for concrete admixture etc... 22

23 2. Main Business Ethylene Oxide Major Application Fabric detergents Polyester resins Synthetic detergents (Ethylene oxide, Ethanolamine, (Ethylene glycol) (SOFTANOL) SOFTANOL) PET resins (Ethylene glycol) Polymers for concrete admixture (AQUALOC) 23

24 2. Main Business Ethylene Oxide Business Establish an Earnings Base That Does Not Depend on the State of the Market Non-EG ratio: Keep of over 70% (Domestic average [including Nippon Shokubai] 50%) EO centralization Expansion of derivatives 1) Expansion of (meta) acrylic acid special ester October 2013 Kawasaki Plant (new land acquired in 2007) new 20,000 ton/y facilities on stream * Meet the growing demand * Reduction in quantity of EO shipped 2) Expansion of polymer for concrete admixture April 2012 Kawasaki Plant (existing premises) 16,000 ton/y facilities scheduled 3) Launch of drying shrinkage reducing agent for concrete Jointly developed with 3 construction majors, with commercial production from October 2011 Aim for flexible product configuration as a top priority to improve facility utilization 24

4. New Business Electronics & Information

resin for optical materials Acryviewa Resin:

beginning of 2012 Spherical fine particles

Encapsulating materials for SiC power devices

25 4. New Business Electronics & Information Materials AK Key Source of fr Revenue Acrylic resin for optical materials Acryviewa Resin: High performance Film: Shipment start from the beginning of 2012 Spherical fine particles Resist polymers Product under development: Encapsulating materials for SiC power devices Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 25

Molding and firing i technologies cultivate t through catalyst manufacturing High quality + mass production Expansion of production facility 3

26 4. New Businesses New Energy Materials ANext Next-Generation Core Business Materials for fuel cells (zirconia sheets and cells) FY3/201 1 Projected to turn profit with twice the shipment volume of previous fiscal year FY3/2016 Long-term sales target: 5 billion yen Strength: Molding and firing i technologies cultivate t through catalyst manufacturing High quality + mass production Expansion of production facility 3 million pieces/year in 2011 Expansion of sales focusing primarily on Bloom Energy (U.S.) Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 26

4. New Business Battery Materials Materials for lithium-ion batteries Lithium bis(fluorosulfonyl)imide (LiFSI) Features: es Strong points: FY3/2013 FY3/2016 Life extension for lithium-ion batteries

27 4. New Business Battery Materials Materials for lithium-ion batteries Lithium bis(fluorosulfonyl)imide (LiFSI) Features: es Strong points: FY3/2013 FY3/2016 Life extension for lithium-ion batteries and greatly improved safety Established synthesis technology using original catalysts, enabling mass production of high-purity products cheaply (first in the world) Ensure production capacity of several hundred tons per year in 2013 Scheduled for launch Aim for sales of 2 billion Solid electrolyte polymer for lithium-ion batteries Aim for early launch Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 27

28 5. Development of New Technologies Acrylic Acid Production from Biomass Resources New method: Glycerine method from biomass resources HO Glycerine Dehydrate HO OH Developed highperformance catalysts! H 2 C Acrolein O Oxidation C H 2 O OH Acrylic acid Current method: Propylene oxidation Polymerization C H 2 Propylene CH 3 Oxidation SAP, Adhesives. Paints, etc. Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 28

29 6. Return Policy Dividends, Basic Approach Taking overall account of business expansion and corporate structural Reinforcement, and based on forecasts of the trend in consolidated earnings, we are aiming to improve dividend return levels in the medium term Expansion of Investment in Core Businesses Large Internal Reserves FY3/2011 dividend Net Income 21.1 billion yen 22 yen/share FY3/2012 dividend (forecast) Net Income 21.5 billion yen 22 yen/share Yen/share Interim End of period Total 2 yen/share increase Ordinary vs. to the previous announcement dividend Commemorative dividend * Total * 50th anniversary of the Himeji Plant (2 yen) and 70th anniversary of NIPPON SHOKUBAI (2 yen) % FY3/2005-3/ year average FY3/2007-3/ year average Yen/share Interim End of period Total Ordinary dividend Commemorative dividend Total Average payout ratio Average total rate of return million treasury shares were cancelled. 29

30 Notes to Readers This presentation material ( the Material ) aims to provide readers with referential information, not to solicit investment. The Material contains forward-looking statements, and statements of this nature are based on reasonable judgments in accordance with information currently available. We neither commit to nor guarantee the contents of the Material. Readers should be aware that actual results and events might differ substantially from these projections. IR Contacts: NIPPON SHOKUBAI CO., LTD. Investor & Public Relations Dept. Hibiya-Dai Bldg Uchisaiwai-cho, Chiyoda-ku Tokyo Japan TEL: FAX: URL: 30

NIPPON SHOKUBAI CO., LTD.

Voluntary translation for readers convenience NIPPON SHOKUBAI CO., LTD. 1 st Half of FY Ending March 2012, Large Meeting 8 November, 2011 Progress of our long-term business plan TechnoAmenity 2015 and