Nippon ppt

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A chemical company providing new values

through innovative technologiesg

Code: 4114

arc

Investor & Public Relations Dept.



.

2. NIPPON SHOKUBAI – Who we are

.

4. New Business

.

6. Return Policy

SAP: Superabsorbent Polymers

AA: Acrylic Acid

AES: Acrylates

EO: Ethylene Oxide

EG: Ethylene Glycol

NAII: NA Industries, Inc. (USA)

NSI: PT.NIPPON SHOKUBAI INDONESIA (Indonesia)

Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 2



1. Introduction

Ja anese Functional Chemicals:Ja anese Functional Chemicals:

Hold major share of world market

apanese compan es o a ar arger s are o e g o a

functional chemicals market than they do the automotive,

electronics, and electronic parts markets.

Lead the world in innovation Advances in functional chemicals brings about innovation at

manu ac urers o assem e pro uc s au omo es an

electronics)

Su ort industr and lifest les worldwide

Functional chemicals are fundamental materials for all

manufacturing and constitute a vital part of everyday life.




1. Introduction

Ni on Shokubai Products and Technolo :Ni on Shokubai Products and Technolo :

Hold major share of world market

(more than 25%)

Acrylic Acid: Nippon Shokubai technology supports approximately

’

Lead the world in innovation The permeability of SAP helps make disposable diapers thinner.

Electronics and information materials help make displays thinner

and enable high definition properties.

Demand in a wide range of sectors stabilizes sales performance.

High proportion used for manufacturing of daily


necessities, making demand less vulnerable to economic

downturn.



2. NIPPON SHOKUBAI

- Who we are

FY 3/2011 Record in income

Growth reflects demand

f

FY 3/2012 New record in income

Fully prepared for increase

from emerging markets in

Asia and other regions

in demand following

Lehman shock due to timely

increase in capacity

Feb. 2012 Ethylene Oxide +70,000 (Kawasaki) 324,000 tons/year

Apr. 2012 Acrylic Ac id +80,000 (Himeji ) 620,000 tons/year

Oct. 2012 SAP +60,000 (Himeji) 470,000 tons/year

First half: Price of raw materials surges

Second half: Demand drops sharply

Major loss from revised inventory valuation

(100 million yen)

300

350

3,000

3,500

Ordinary Income Sales

Across-the-board cost cutting while

maintaining employment150

200

250

1,500

2,000

2,500

Increase supported by rise in capital investment50

100

500

1,000

Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.

5

2005 2006 2007 2008 2009 2010 2011 (projections)



2. NIPPON SHOKUBAI

- Who we are

- a or ro uc s

Petroleum

Ethylene Propyleneaphtha

Ethylene

Basic chemicals

Acrylic

A id

xide

Ethylene

glycols

Acrylates

Acid

Carboxylic

Superabsorbent

Functional

chemicals

Polymer for

Carboxylic

acid

polymers

polymer

E I

materials

y

paints, adhesive

s, and tackifiers

Specialty

acrylates


Environment&

catalysts

Automotive

catalysts

Zirconia

sheet

Process

catalysts



2. NIPPON SHOKUBAI

- Who we are

FY3/2011

Basic chemicals Functional chemicals

Environment & catalyst

8%

43%

Core business

49%

Core business

Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.7



2. NIPPON SHOKUBAI

- Who we are

Established August 1941

Common stock 25 038 million enommon stock

(As of March 31, 2011)

Net sales 288,345 million yen

(Consolidated Statements, FY3/2011)Number of employees 3,576

,

Stock listings Tokyo Stock Exchange, First Section

Osaka Securities Exchan e First Section




2. NIPPON SHOKUBAI

- Who we are

1941

・Succeeded in first commercial production of

1941

1943

・Opened Suita Plant

<Technological Innovation>

(1) Founding —This year marks 71st

anniversary1941

Succeeded in first commercial production of

phthalic anhydride in Japan.

1952

・Succeeded in mass production of maleic

anhydride by oxidation of benzol.

C i li d d ti f th l id f

1949

・Renamed Nippon Shokubai Kagaku Kogyo Co., Ltd.

1959

・Opened Kawasaki Plant (the present Chidori

Plant of the Kawasaki Plants)

1960

1943

・Opened Suita Plant

1959

・Commercialized production of ethylene oxide for

the first time in Japan with our own technology.

1960

・Opened Himeji Plant (the present Himeji Plant)

1967

・Opened Kawasaki Second Plant (the present

Ukishima Plant of the Kawasaki Plants)

1988

・Established NA Industries, Inc. in Tennessee,

USA

1970

(5) Global expansion begins

-

Added to strategic products

(3) AA/AES -Core products for 40 years

USA.

1991

・Renamed NIPPON SHOKUBAI Co., Ltd.

1996

・Established PT. Nisshoku Tripolyta Acrylindo in

Indonesia (the present PT. NIPPON SHOKUBAI

INDONESIA)

1983

(4) SAP - Primary core products for 30 years

1998

・Established NIPPON SHOKUBAI ASIA PTE

LTD. in Singapore

1999

・Established NIPPON SHOKUBAI EUROPE

N.V. in Belgium

INDONESIA)

1987

・Started production of polymers for concrete

admixture

1997

・Started production of dioxins decomposition

catalysts

2003

・Established NISSHOKU CHEMICAL INDUSTRY

CO., LTD. in China

catalysts

2000

・Started production of functional dyes.

2004

・Established SINGAPORE ACRYLIC PTE LTD. &

SINGAPORE GLACIAL ACRYLIC PTE LTD. in

Singapore

2006

・Started production of acrylic resins for optical

(6) Electronics and information materials

business takes root


2008

・Acquisition of the major shares of NIPPON

NYUKAZAI Co., LTD. and SINO-JAPAN CHEMICAL

Co., Ltd.

2006

Started production of acrylic resins for optical

materials



2. NIPPON SHOKUBAI

- Who we are

Masanori Ikeda Presidentasanori Ikeda President

Graduated from Tokyo University, received an MBA from Cornell

University.

2003: Member of the Board of Directors; 2006: Managing Director; 2009:

Senior Managing Director; 2010: Executive Vice President

Led many overseas projects, including NAII. Played an important role in

our global expansion.

Primarily engaged in corporate planning. Demonstrated abilities in

implementing ERP (integrated enterprise system) and acquiring Nippon

Nyukazai, etc. Leveraged extensive experience in general business

operations to contribute to the ongoing success of the company.

Continuing the present course. Aims to achieve not only the numerical

targets of TechnoAmenity 2015, but also the substance.ee s e u con ence o s a e o ers roug ro us ac v es.




-

2. NIPPON SHOKUBAI

- Who we are

Slogan:

Challenge to the future make dreams come true

logan:

Challenge to the future make dreams come true

Corporate Philosophy

Management Philosophy

Slogan:

Challenge to the future, make dreams come true

logan:

Challenge to the future, make dreams come true

Providing affluence and comfort

to people and society,

with our unique technology

Based upon a deep respect for humanity

Coexisting with society, and working in harmony

with the environment

Pursuing innovative technology

with our unique technology

Operating on the global stage


th h i ti t h l i


th h i ti t h l i

ision

2010 – 2015 Six-Year Business Plan

through innovative technologieshrough innovative technologies

Undertake steady global expansion of AA/SAP

Improve profitability of current products (Profitability Improvement Committee)

Get new businesses (materials for E&I, new energy, batteries) on track

11

( , gy, )



2. NIPPON SHOKUBAI

- Who we are

Vision/Target for

FY2025E&I New

Current

Health,

us ness or o o

Materials Energy

Current

Business

Medical

Make one of the Fuel cell Improve Medical

Level to attain

in

centerpieces of

profit generation materials profitabilitymaterials

Functional

foodales

¥30 billi

Sales

¥5 billi

Profitability

Improvement

Technology-related ”green” chemistry, environmental protection

FY2015

¥30 billion ¥5 billion

Improvement

committee

Technology related green chemistry, environmental protection

and evaluation

Catalyst, organic synthesis, polymer composition and production

Now


technologies



2. Main Business

Propyleneropylene

Acrylic acid

Direct acrylic acid sales

Basic chemicals

Acrylates

F ti lunctional

chemicals

etc….

Superabsorbent polymer


etc….



2. Main Business

Leading Manufacturereading Manufacturer

Worldwideorldwide

Superabsorbent

Worldwideorldwide

Superabsorbent

polymer

(SAP) *

Major application: Disposable diapers

14

ow ere po ymer, e pr nc pa raw ma er a e ng

acrylic acid. A single gram of this polymer is able toabsorb as much as 1,000 grams of liquid.



2. Main Business

Preventing Desertification

Preventing Desertification

15



2. Main Business

Supply and Demand TrendsSupply and Demand Trends

Demand Strong growth expected in line with economic growth in developing

countries

7 to 8% annual growth7 to 8% annual growth

Global demand: approx. 1.7 million tons (2010 estimate)

Supply Emerging manufacturers, besides current majors, are planning to

enter and expand SAP businsess

Reinforcement of Nippon Shokubai Facilities

October 2010 Himeji: 60,000 t/year―In operation

June 2012 America: 60,000 t/year―Build & scrap

August 2013 Indonesia: 90,000 t/year―Scheduled

―

Progressing as

planned

16

,



2. Main Business

Maintain the ToMaintain the To --Class Market Share and Ensure ProfitabilitClass Market Share and Ensure Profitabilit

The Basis of Nippon Shokubai’s SAP Strength

1) R&D strength in products and processes

2) Integrated production from raw materials, AA

3) Stable supply network based on productionfacilities in Japan, US, Europe and China

4) Intellectual property strategy to maintaineffectiveness of technology

5) Excellent customers with strong growth

Risks and Countermeasures

1) New entrant products in developing countries gathering strength

• General cost reductions through process innovation including AA, production efficiency,

and streamlined logistics

• Proper implementation of intellectual property strategy

17

2) Reduced price competitiveness due to strong yen

• Increase production at facilities with less risk from strong yen



2. Main Business

Paints (Acrylates) Adhesives and tackifiers

(Acrylates)

Printing ink

(Acrylates)

18

Diapers (AQUALIC CA) Water retaining agent for

horticulture (ACRYHOPE)

Car paints

(Specialty acrylates, specialty methacrylates)



2. Main Business

Supply and Demand TrendsSupply and Demand Trends

5 to 6% annual5 to 6% annual rowthrowth

Global demand approx. 4 million tons (2010 estimate)

Easing of supply and demandEasing of supply and demand

Calender year 2010 2011 2012 2013

Demand (A) 3,960 4,150 4,340 4,550

isis expected in the midexpected in the mid--termterm (Kt)

Annual available supply (B) 5,140 5,270 5,850 6,240

Nominal operating rate (A/B) 77% 79% 74% 73%

Reinforcement of Ni on Shokubai Facilities

Growth based on increased demandGrowth based on increased demand

April 2010 Himeji: 80,000 t/year －In operation

August 2013 Himeji: 80,000 t/year －Scheduled

August 2013 Indonesia: 80,000 t/year －Scheduled

Progressing

as planned

19

The majority of Shokubai’s expanded AA facilities are used for internal use for SAP production and

external sales to the other SAP producers.



2. Main Business

AA facilities (Kt/y)

SAP f iliti (Kt/ )

Belgium (Antwerp)

SAP facilities (Kt/y)

60

China (Zhangjiagang)

540

320

60

60 60

60

U.S. (Houston)

Singapore (Jurong Island)

Japan (Himeji)

40

9040

ingapore (Jurong Island)

Indonesia (Cilegon)

9040

Current End of 2014

AA 620 780

Production capacity (Kt/y)

AA 620 780

SAP 470 590



2. Main Business

AA Production Capacity

590Kt/y

Worldwide total: Over 5 million tons

SAP Production Capacity

Worldwide total: Over 1.7million tons

1,500

2

500

600

Kt/y590Kt/y

(End of 2014)

780Kt/y

6

1,000

47

300

400

780Kt/y

(End of 2013)

62

47

100

200

A B Nippon

Shokubai

C D Others Nippon

Shokubai

A B C D Others

21



2. Main Business

Ethylene

Ethylene oxide

Direct ethylene oxide sales

thylene oxide

Direct ethylene oxide sales

Ethylene glycol

Basic

Chemicals

Ethylene glycol

Ethanolamine

Higher alcohols

Functional

Chemicals

Polymers for concrete admixture

g

22

Chemicals

etc....



2. Main Business

Fabric detergents

Polyester resins Synthetic detergents

abric detergents

(Ethylene oxide, Ethanolamine,

SOFTANOL)

Polyester resins

(Ethylene glycol)

Synthetic detergents

(SOFTANOL)

PET resins

(Ethylene glycol)

Polymers for concrete admixture

(AQUALOC)

23



2. Main Business

Establish an Earnin s Base That Does Not De end on the State of the MarketEstablish an Earnin s Base That Does Not De end on the State of the Market

Non-EG ratio: Keep of over 70%

Domestic avera e includin Ni on Shokubai 50%

EO centralization

Expansion of derivatives

October 2013 Kawasaki Plant (new land acquired in 2007) new 20,000 ton/yfacilities on stream

* Meet the growing demand

* Reduction in quantity of EO shipped

2) Expansion of polymer for concrete admixture

April 2012 Kawasaki Plant (existing premises) 16,000 ton/y facilities scheduled3) Launch of drying shrinkage reducing agent for concrete

Jointly developed with 3 construction majors, with commercial production fromOctober 2011

24

Aim for flexible product configuration as a top priority Aim for flexible product configuration as a top priority

to improve facility utilizationto improve facility utilization



4. New Business

Acrylic resin for optical materials “Acryviewa ”

ey ource o evenueey ource o evenue

2012

Resist polymers

Product under develo ment: Enca sulatin materials for SiC ower


devices

25

4 N B i



4. New Businesses

--

Materials for fuel cells (zirconia sheets and cells)

volume of previous fiscal year

FY3/2016 Long-term sales target: 5 billion yen

M ldi d fi i t h l i lti tolding and firing technologies cultivate

through catalyst manufacturing

High quality + mass production

3 million pieces/year in 2011


. .

26

4 N B i



4. New Business

Materials for lithium-ion batteries

Lithium bis(fluorosulfonyl)imide (LiFSI)

Features: Life extension for lithium-ion batteries

and greatly improved safety

Strong points: Established synthesis technology using original

catalysts enabling mass production of high-purityatalysts, enabling mass production of high-purity

products cheaply (first in the world)

Ensure production capacity of several hundred tons

per year n

FY3/2013 Scheduled for launch

FY3/2016

Aim for sales of ¥2 billion

Solid electrolyte polymer for lithium-ion batteries


Aim for early launch27

5 Development of



5. Development of

New Technologies

New method: Glycerine method from biomass resources

OHGlycerine

Dehydrate

OH OH

CH2

Acrolein

CH2

OH

Acrylic acid

Developed high-

performance

catalysts

Oxidation

Ocrolein

Acrylic acid

Current method: Propylene oxidation

catalysts

Polymerization

SAP,

Adhesives.

Paints

Current method: Propylene oxidation

CH 2

Propylene

Oxidation


Paints,

etc.

C H 3Oxidation

28

6 Return Policy



6. Return Policy

,Taking overall account of business expansion and corporate structuralTaking overall account of business expansion and corporate structural

Reinforcement, and based on forecasts of the trend in consolidated earnings,Reinforcement, and based on forecasts of the trend in consolidated earnings,

we are aiming to improve dividend return levels in the medium termwe are aiming to improve dividend return levels in the medium term

xpans on o nves men n ore us nesses arge n erna eserves

FY3/2011 dividend

Net Income 21.1 billion en

FY3/2012 dividend (forecast)

Net Income 21.5 billion en

22 yen/share 22 yen/share

Yen/share Interim End of period Total 2 yen/share increaseOrdinary

dividend9 9 18

Commemorative

dividend* 1 1 + 2 4

Total 10 12 22

Yen/share Interim End of period Total

vs. to the previous announcement

* 50th anniversary of the Himeji Plant (2 yen) and 70th anniversary of NIPPON SHOKUBAI (2 yen)

%FY3/2005-3/2011

7-year average

FY3/2007-3/2011

5-year average

dividend11 11 22

Commemorative

dividend- - -

Total 11 11 22

29

Average payou t ratio 25.6 28.5

Average total rate ofreturn

40.2 37.7

8 million treasury shares were cancelled.



“ ”

information, not to solicit investment. The Material contains forward-looking

statements, and statements of this nature are based on reasonable judgments in

accordance with information currently available. We neither commit to nor guarantee

the contents of the Material. Readers should be aware that actual results and events

might differ substantially from these projections.

IR Contacts:

NIPPON SHOKUBAI CO., LTD.

Investor & Public Relations Dept.

Hibiya-Dai Bldg. 1-2-2 Uchisaiwai-cho, Chiyoda-kuTokyo 100-0011 Japan

TEL: +81-3-3506-7477

FAX: +81-3-3506-7598

30

URL: http://www.shokubai.co.jp

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