Kyowa Hakko Announces Groundbreaking Polyol; On Show at US Polyurethanes Expo, October 2003 World's First Full Commercial Production Due Within Year.

The chemical company of Kyowa Hakko Kogyo Co., Ltd. (Kyowa Hakko), a leading global supplier to the chemical, pharmaceuticals and food industries, has developed a groundbreaking polyol with broad downstream applications including environmental friendly water- and solvent-based coatings.

The full commercial production and marketing of this high performance polyol, named TOE-2000H(1), will be a global first, and will allow manufacturers in fields such as coatings, inks, adhesives, sealants, elastomers and electronics to produce products and materials with completely new characteristics.

Kyowa Hakko is presenting TOE-2000H at the Polyurethanes Expo 2003, running from October 1-3 at Orlando, Florida. The Company is already engaged in trials and discussions with various manufacturers in preparation for commercial production within the year, and interest at the exposition is expected to be high.

Key characteristics of TOE-2000H are its high solubility in solvents (including alcohols), high electrical insulation, and excellent compatibility with olefin-type polyols, which are usually resistant to mixing.

Consequently TOE-2000H should have a much broader application in a wider range of fields than the olefin-type polyols used in industry to date. In urethane coatings, for example, manufacturers until now have had to match the characteristics of many different polyols to each application. In contrast, the excellent solubility, water resistance, compatibility, and adhesiveness of TOE-2000H means that it can be used with a variety of raw materials, and blended with polyolefin-type polyols to allow the production of polyurethane with new and improved qualities.

Kyowa Hakko is pursuing a broad range of applications for TOE-2000H, primarily as a raw material for polyurethane and UV hardening agents, and expects sales to grow to several million dollars per annum within three years, with continued growth thereafter.

The product meets regulatory requirements for export to Europe, and is currently being registered under the Toxic Substances Control Act (TSCA) in the U.S.

(1) About TOE-2000H TOE-2000H is a unique polyol with a paraffin main chain and ethoxy side chains each bearing a terminal hydroxyl group. Material and application patents are pending.

   Characteristics
   -- Colorless, transparent, viscous, liquid polyol
   -- Excellent solubility in a wide-range of solvents from methanol to
      hexane
   -- Mutual solubility with a wide range of resin raw materials; can also
      create a transparent film
   -- When used in urethane coatings displays solubility in alcohols, water
      resistance, heat aging resistance, high resistance to expansion, and
      high electrical insulation
   -- Excellent adhesiveness to a variety of substrates (metal, plastic
      etc.)
   -- Can be used in less hazardous solvent and can be made impact resistant

   Applications
   -- As a raw material for polyurethane, UV hardeners, coatings, inks,
      adhesives, sealants and in electronics and other fields
   -- Other: we expect other new applications will be developed for this
      product in additional fields.

  About Kyowa Hakko:

Kyowa Hakko is an industry leading global supplier to the pharmaceuticals, food and chemical industries, with net sales in the fiscal year ending March 31, 2003 of 359 billion yen. The Company was established in 1949 and is headquartered in Tokyo, Japan. Kyowa Hakko's areas of expertise in chemicals include solvents, plasticizers, enhanced functional resins, and other fine chemicals.

Kyowa Hakko is also a leader in the development and application of fermentation technology, and new forms of biotechnology. Kyowa Hakko's core pharmaceutical research focuses on drug discovery using antibody-based technologies and on developing therapeutic agents for cancer and allergies.

CONTACT: Kiyoyuki Ogura, Marketing Manager of Kyowa Hakko U.S.A., Inc., [phone], or fax, [phone], or [e-mail]; or Dr. Brian Hanrahan Marketing Manager of Kyowa Hakko U.S.A., Inc., [phone], or fax, [phone], of [e-mail]