Shares in Showa Aluminum Powder to be Transferred to the ITOCHU Group.

Tokyo, Japan, Apr 27, 2006 - (JCN Newswire) - ITOCHU Corporation (ITOCHU), ITOCHU CHEMICAL FRONTIER Corporation (ICFC), and Showa Denko  K.K. (SDK) have reached basic agreement that the majority of shares in Showa Aluminum Powder K.K. (SAP), a wholly-owned subsidiary of SDK, should be transferred to the ITOCHU Group toward the end of May. As a result of the transaction, ITOCHU and ICFC will obtain 51.06% and 34.04%, respectively, of SAP shares, while SDK will retain 14.9%.

Established in 1966 and headquartered in Gose City, Nara Prefecture, SAP has been producing and selling aluminum paste, commanding the leading share in the domestic market of aluminum paste for plastic paint applications. The company's aluminum paste is widely used as a metallic-silver pigment in plastic paint for mobile phones and digital electric appliances.

ICFC, a consolidated subsidiary of ITOCHU, is expanding its core paint-related business. The company considers the paint materials operation as a strategic-growth business, marketing competitive product lines and expanding the business mainly in the North American and Asian markets. ICFC is aiming to further expand the business through synergies with SAP's existing operations.

SDK has decided to transfer the majority of shares in SAP based on the belief that the equity participation by ITOCHU and ICFC will enable SAP to consolidate its strong position in the aluminum paste market.

ITOCHU and ICFC will maintain SAP's name, management team, employees, plant and brands. At the same time, they will utilize their own networks and marketing know-how to expand sales of aluminum paste mainly in China and other Asian countries where the plastic paint market is expected to grow sharply, centering on mobile phone and digital electric appliance applications.

SDK will continue to provide technical support to help strengthen the product lines and develop new products.

Reference: Company Outlines

Showa Aluminum Powder K.K.

Head office: 410, Oaza Muro, Gose City, Nara Prefecture

Establishment: August 1966

Capital: 200 million yen

President: Kiyonori Tokuda

Scope of business: Production and sale of aluminum paste

ITOCHU Corporation

Head office: 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo

Establishment: December 1949

Capital: 202,241 million yen

President: Eizo Kobayashi

Scope of business: General trading firm

ITOCHU CHEMICAL FRONTIER Corporation

Head office: 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo

Establishment: September 1971

Capital: 1,100 million yen (95.54% owned by ITOCHU Corp.)

President: Jun Sato

Scope of business: Export/import and sale of chemical products

Showa Denko K.K.

Head office: 13-9, Shiba Daimon 1-chome, Minato-ku, Tokyo

Establishment: June 1939

Capital: 110,451 million yen

President: Kyohei Takahashi

Scope of business: Production and sale of petrochemicals, chemicals, electronics, fabricated aluminum products, etc.

About ITOCHU Corporation

ITOCHU Corporation is one of Japan's leading trading companies and is engaged in a wide variety of businesses, including textiles, machinery, aerospace, information technology, multimedia, metals, energy, chemicals, forest products, food, retail, financial services and so forth. ITOCHU maintains over 130 offices around the world and owns over 640 subsidiaries and affiliates. ITOCHU's sales last year reached 9.5 trillion yen (US$90 billion). ITOCHU aims to build new profit-making strategies and adding new functions in order to become more global, and to foster businesses in new fields.

About Showa Denko K.K.

Showa Denko (SDK)(TSE: 4004)(OTC: SHWDF) is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. SDK makes petrochemicals (ethylene, propylene), aluminum products (ingots, rods) electronic equipment (hard disks for computers), and inorganic materials (ceramics, carbons). The company has overseas operations and a joint venture with Netherlands-based Montell and Nippon Petrochemicals to make and market polypropylenes. In March 2001, SDK merged with Showa Denko Aluminum Corporation to strengthen the high-value-added fabricated aluminum products operations, and is today developing next-generation optical communications-use wafers.

Source: ITOCHU CorporationShowa Denko K.K.

Contact:

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Showa Denko
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