Showa Denko K.K. (SDK) Group to Participate in Solvent Recycling in China.

Tokyo, Japan, Sept 13, 2005 - (JCN Newswire) - Shoko Co., Ltd., the core trading firm in the Showa Denko  Group (TSE: 4004), has decided to participate in the production and recycling of solvents in China by investing in a Chinese firm jointly with Toyotakagaku Kogyo Co., Ltd.

Due to the rapid expansion of automobile production in China, a large amount of solvents is used in the process of painting cars and producing paints. Thus, recycling of used solvents is important in reducing costs and protecting the environment.

Under the circumstances, Shoko and Toyotakagaku will acquire this month new shares to be issued by Guangzhou Raysound Chemical Co., Ltd., a company based in Guandong Province producing solvents for paint.

Guangzhou Raysound Chemical will provide an integrated service of collecting used solvents from manufacturers of cars/paints/resins, distilling, purifying and adjusting respective components and offering recycled solvents to the customers.

To meet growing demand, Guangzhou Raysound Chemical will build a new recycling facility and expand its solvent production facility for start-up in May 2006.

Furthermore, Guangzhou Raysound Chemical will introduce the technology of Toyotakagaku, which has accumulated experience in the recycling of used solvents in Japan. Shoko will send its employees to assist in the procurement of raw materials and sales of products. Raysound Chemical (Holdings) Limited, the parent company of Guangzhou Raysound Chemical, will provide its sales network of various chemicals to facilitate the sale of recycled solvents.

Guangzhou Raysound Chemical's capital will be increased to HK$14.9 million (approx. JPY 220 million), of which Raysound Chemical (Holdings) will own 65%, Toyotakagaku 20%, and Shoko 15%. Guangzhou Raysound Chemical is planning to increase its annual sales to JPY 1 billion in 2010.

Outline of Guangzhou Raysound Chemical Co., Ltd.

Head office:         Zhengcheng City, Guandong Province
Establishment:       December 1997
President:           K.P.Yang
Scope of business:   Production of thinner
Capital:             HK$7 million
Annual sales:        JPY 550 million
Production capacity: 7,200 tons/year

Outline of Raysound Chemical (Holdings) Limited

Head office:         Hong Kong
Establishment:       1994
President:           J.K.Huang
Scope of business:   Wholesale of chemicals
Capital:             HK$20 million
Annual sales:        JPY7.7 billion
Volume of chemicals
  handled:           70,000 MT/Y
Major items:         VAM, MEK, acetone, phenol, DMF, acrylic acid, MMA,
                     EAC, POVAL

Outline of Toyotakagaku kogyo Co., Ltd.

Head office:         Toyoda City, Aichi Prefecture, Japan
Establishment:       January 1960
President:           Toshio Sugiura
Scope of business:   Recycling of thinner
Capital:             JPY 15 million
Annual sales:        JPY 3 billion
Capacity:            Collecting and purifying more than 10,000 tons per year
                     of used thinner; the handling volume is increasing

Outline of Shoko Co., Ltd.

Head office:         Shibakoen, Minato-ku, Tokyo, Japan
Establishment:       1947
President:           Hiroshi Matsubara
Scope of business:   Wholesale
Capital:             JPY 8 billion
Annual sales:        JPY 125.5 billion
Major handled items: Various types of chemicals, plastics, aluminum,
                     inorganic materials, analytical equipment, etc.

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