Shin Etsu Chemical : to make ¥110 billion facility investment in its silicones business

Shin-Etsu Chemical Co., Ltd. (Head Office: Tokyo, President, Yasuhiko Saitoh) will implement close to ¥110 billion in facility investments for its silicones business, one of its main businesses. It will expand its production capacity of silicone monomer, the intermediate product of silicones, and various types of silicone fluids, resins and rubber end products at the company's main bases in Japan and globally. We are receiving a wide variety of requests for our silicone products from many customers around the world, and in order to meet these customer requests, we are implementing a sequential series of new investments. By means of these investments, we will further strengthen our integrated production system, and at the same time, we will fortify our ability to contribute to issue solutions for our customers.

These facility investments will be implemented in stages over about a period of two-and-a-half years, and the expansion of the production capacity of both silicone monomer and silicone end products will proceed in parallel. The breakdown of investment amounts is expected to be about ¥50 billion for the expansion of production capacity of intermediate products such as monomers, about ¥50 billion for the expansion of production capacity of end products and about ¥10 billion for the expansion of other secondary facilities such as infrastructure and shipping. The expansion of capacity for silicone monomer will be done at our existing bases in Japan and Thailand, and in addition to Japan, the capacity expansion for our group of end products will be carried out at our existing bases in six overseas countries.

In view of the requests coming from our customers and the expected demand, the demand for silicone products is expected to increase at a rate surpassing that of the average increase in the world's GDP. In this way, we will extensively capture the demand for silicone products for which this kind of steady growth is expected, and at the same time, we will flexibly meet it. For Shin-Etsu Chemical, silicones have been a strategically important business from the past up to the present, and going forward as well, we will work to further enhance the existence value of silicones. With these investments for strengthening our silicones production capacity, we will grow together with our customers and will strengthen our position as a leading global silicones manufacturer.

For inquires about this matter, please contact:

Shin-Etsu Chemical Co., Ltd. Public Relations Dept. Tetsuya Koishikawa Tel: [phone], or from outside Japan: 81-3-3246-5091 Fax: [phone], or from outside Japan: 81-3-3246-5096 e-mail: [e-mail] www.shinetsu.co.jp