2011 Achievement of Medium-Term Business Plan “PEGASUS ... · New market in automotive parts and railcars • High transparency • High resistance to heat • High surface hardness

¥47.4billion

¥220billion

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2011 Achievement of Medium-Term Business Plan “PEGASUS” (2011-2015) Under the severe business environment, we mainly achieved the following:• Growth in HD, Electronics, and Inorganics• Expanded HD media production capacity• Decided to expand graphite electrode production capacity in the U.S.A.

R&D7%

Electronics32%

Inorganics19%

Chemicals17%

Aluminum9%

Petrochemicals5%

2011 Operating Profit by Segment Capital Investment Plan 2011-2013

R&D7%

Others11%

Others

Electronics32%

Electronics57%

Inorganics19%

Inorganics18% Chemicals

17%

Chemicals4%

Aluminum9%

Aluminum12%

Petrochemicals5%

Petrochemicals7%

Strengthening our presence in the growing Asian market

� Petrochemicals � Chemicals � Electronics � Inorganics � Aluminum

Energy/Environment Market

High-grade Electronic Device Market

Industrial Base Materials Market

SiC Epi-wafers for Power Devices

Organic EL for Lighting

Functional Materials

Battery Materials

Allyl Derivatives

High-purity Gases for

SemiconductorProcessing

Growthand

New GrowthIncreasing overseas production to cope with higher yen

• Capacity expansion for anode material (SCMG™), additive in anodes/cathodes (VGCF ™), alu-minum packaging material, and cathode collectors (SDX ™)

• Film for touch screens in smartphones

• High transparency• High resistance to heat• High surface hardness

• Leading epitaxial wafer maker in Japan

• Targeting power devices for electric appliances in 2012

• New market in automotive parts and railcars

• Expanded high-purity ammonia pro-duction capacity in Japan, Taiwan, and China (3,000 t/y�5,000 t/y)

• Started hydrogen selenide production• Quickly developing next-generation

gases• Expanding sales through a direct

marketing system

• Our target is general lighting.• Coating with phosphorescent

materials• Achieved luminous efficiency of

40 lm/W, through a new device structure

• Aiming to further improve lumi-nance, luminous efficiency, life, and cost structure

• General lighting market to grow

LEDs

ChinaTo set up a new production site of high-purity aluminum foils for electrolytic capacitors

IndonesiaAlumina plant construction started (April 2011)

SingaporeExpanded production capacity for HD media (June 2011)

TaiwanExpanded production capacity for high-purity ammonia gases for electronics(1,500 t/y � 2,500 t/y)

ChinaExpanded production capacity for high-purity ammonia gases for electronics(500 t/y � 1,000 t/y)

ChinaExpanded production capacity for rare earth magnetic alloys (2,000 t/y � 3,000 t/y)

Strengthened total production capacity in China to 4,000 t/y

Percentage of sales in Asia (except Japan): 21.3% (’05) � 28.5% (’11)

Please refer to page 17 with regard to R&D strategy under “PEGASUS.”

Inorganic Functional Materials

Aluminum Cans

Shotic

High-purity Aluminum Foils

LBP Cylinders

Petrochemicals

Base (Stable)

• Established NS Styrene Monomer Co., Ltd.� Aiming to stabilize operations and to

reduce costs• Aiming to realize a butadiene-linked

pricing formula for C4 fractions

• Taking steps to increase competitiveness�Reorganized the industrial gas business and strength-ened marketing power

High-purity foils• To expand capacity for high-purity foils for

aluminum electrolytic capacitors• Demand for capacitor-grade foils to grow • Decided to establish a new production site

in Nantong, China

• Expanded TiO2 production capacityApplications: Ceramic capacitors

Basic Chemicals

Graphite Electrodes

HD Media

Rare EarthsBase (Growth)

• To expand capacity at SDKC in 2013

• Planning to build the third production base (in Asia)

� Responding to growth in global steel production

• Expanded capacity, centering on Singapore (up 23%)

• Established position as No. 1 independent supplier• Launched PMR 6G media ahead of competitors�Expanding supply of “Best-in-Class” products

• Expanded capacity at JVs in China for the growing market for Nd-based high-performance magnets (3,000 t/y�4,000 t/y)

� Ensure stable purchase of rare earth materials• Full-scale operation of a metal recycling plant in

Vietnam• Main applications: High-performance motors for

electric vehicles and hybrid cars

Showa Denko K.K. 53 A Unique Chemical Company 4

New market in automotive parts New market in automotive parts and railcarsand railcars

• • High transparencyHigh transparency• High resistance to heatHigh resistance to heat• High surface hardnessHigh surface hardness

2011 Achievement of Medium-Term Business Plan “PEGASUS” (2011-2015) Energy/Environment Market

High-grade Electronic Device Market

Industrial Base Materials Market

SiC Epi-wafers for Power Devices

Organic EL for Lighting

Functional Materials

Battery Materials

Allyl Derivatives

High-purity Gases for

Semiconductor Processing

Growthand

New Growth

• Capacity expansion for anode material (SCMG™), additive in anodes/cathodes (VGCF ™), alu-minum packaging material, and cathode collectors (SDX ™)

• Film for touch screens in smartphones

• High transparency• High resistance to heat• High surface hardness

• Leading epitaxial wafer maker in Japan

• Targeting power devices for electric appliances in 2012

• New market in automotive parts and railcars

• Expanded high-purity ammonia pro-duction capacity in Japan, Taiwan, and China (3,000 t/yD5,000 t/y)

• Started hydrogen selenide production• Quickly developing next-generation

gases• Expanding sales through a direct

marketing system

• Our target is general lighting.• Coating with phosphorescent

materials• Achieved luminous efficiency of

40 lm/W, through a new device structure

• Aiming to further improve lumi-nance, luminous efficiency, life, and cost structure

• General lighting market to grow

LEDs

Please refer to page 17 with regard to R&D strategy under “PEGASUS.” 4

Inorganic Functional Materials

Aluminum Cans

Shotic

High-purity Aluminum Foils

LBP Cylinders

Petrochemicals

Base (Stable)

• Established NS Styrene Monomer Co., Ltd.D Aiming to stabilize operations and to

reduce costs• Aiming to realize a butadiene-linked

pricing formula for C4 fractions

• Taking steps to increase competitiveness DReorganized the industrial gas business and strength-ened marketing power

High-purity foils• To expand capacity for high-purity foils for

aluminum electrolytic capacitors• Demand for capacitor-grade foils to grow • Decided to establish a new production site

in Nantong, China

• Expanded TiO2 production capacity Applications: Ceramic capacitors

Basic Chemicals

Graphite Electrodes

HD Media

Rare EarthsBase (Growth)

• To expand capacity at SDKC in 2013

• Planning to build the third production base (in Asia)

D�Responding to growth in global steel production

• Expanded capacity, centering on Singapore (up 23%)

• Established position as No. 1 independent supplier• Launched PMR 6G media ahead of competitors DExpanding supply of “Best-in-Class” products

• Expanded capacity at JVs in China for the growing market for Nd-based high-performance magnets (3,000 t/yD4,000 t/y)

D Ensure stable purchase of rare earth materials• Full-scale operation of a metal recycling plant in

Vietnam• Main applications: High-performance motors for

electric vehicles and hybrid cars

Showa Denko K.K. 54