January 19th,2006
Sekisui Chemical Co., Ltd.

• Three new overseas plants (China, the Netherlands, USA) will be built by the end of 2007
• Automotive Materials Development Center is planned for fiscal 2006 to support new market development

The High Performance Plastics Company (President: Takayoshi Matsunaga) of Sekisui Chemical Co., Ltd. (President: Naotake Okubo) are pleased to announce the implementation of the AT1000 Plan to expand automotive materials business operations, with the goal of 100 billion yen in sales by fiscal 2010.

1. The current state of our automotive materials business operations - Two lines of business hold the highest market share worldwide

Our automotive related materials business (AT business) has 2 basic aims: "product functionality enhancement" and "accelerated global expansion" It provides a variety of automotive related products including interlayer films for laminated glass, foams for interior trim, adhesive tapes, and vehicle bumpers. Sales of approximately 50 billion yen are forecasted for fiscal 2005. Our interlayer films and foams for interior trim in particular have grown into the top global share position, with more than 40% of the world market. In other automotive related areas as well, we currently provide over 50 products, including product families that are worldwide firsts.

2. The future of our automotive related materials business -AT1000 Plan

The automotive manufacturing industry today is engaged in global technology competition to increase fuel economy, reduce vehicle weight, control more automotive functions electronically, etc., with the basic aim of improving the three key factors of "the environment, safety, and comfort." While we consider our most important challenge to be "further strengthening our existing lines of business by accelerating global expansion," we will also enhance our exploration, planning, and development capabilities to respond to new demands arising from global automotive technology competition. In fiscal 2006, we will launch the new Automotive Materials Development Center while reinforcing the capabilities of the Automotive Business Planning Group. We are aiming for 100 billion yen in fiscal 2010 (double that of fiscal 2005) as our sales goal.

3. Overview of the AT1000 Plan

Basic Aims

1. Expansion of existing lines of business - Construction of three new overseas plants by the end of 2007 in preparation for accelerating global expansion

We currently boast approximately 40% of the global market share in interlayer films for automotive laminated glass. Promoting manufacturing at the point of demand, we have five manufacturing centers located in Japan, Mexico, the Netherlands, Thailand, and China, as well as 13 sales offices covering every continent. We are also promoting manufacturing at the point of demand for foams for automotive interiors as well, controlling approximately 47% of the world market share. Manufacturing is carried out at 12 locations, including Japan, the USA, the Netherlands, Thailand, and Korea, and we have 43 sales offices located around the world. In other automotive related areas, we are developing products that are world firsts and exporting them into the global marketplace. We will quicken the pace of expansion of overseas manufacturing centers to keep pace with accelerating global business development. In particular, we will build a new foam plant in China, a plant to manufacture raw materials for interlayer films in the Netherlands, and a new interlayer film plant in the USA, all by the end of 2007.

New Plant Construction Product Manufactured Production Capacity Estimated Launch Comments China Foam plant (Hebei Province) •Cross-linked polyolefin foam for automotive interiors 1.5 million units/year 2006 Summer The first factory in China making foams exclusively for automotive use The Netherlands plant to manufacture raw materials for interlayer films (Limburg Province) •Raw materials for sound insulation & standard interlayer film 12 million units/year 2006 Fall In response to increased demand for sound insulating interlayer films in Europe USA Interlayer film plant (Kentucky) •Standard interlayer films for automotive laminated glass •Sound insulating interlayer films for laminated glass 6 million units/year 2007 Fall Expansion of market share in North America

2. Breaking into new fields - Launch of Automotive Materials Development Center in fiscal 2006

To strengthen our development system, in fiscal 2006 we will launch an Automotive Materials Development Center and enhance the capabilities of the Automotive Business Planning Group.

We aim to break into new growth fields such as "on-board electrical components" and "sound comfort," making use of the core technologies we have cultivated in our housing and IT businesses (nanomaterial technologies, adhesion control technologies, polymer design technologies, precise polymerization technologies, etc.).

Sales Target
Targeting sales of 100 billion yen in fiscal 2010

Through accelerated global expansion of existing lines of business and forays into new fields using our core technologies, our target is to reach sales of 100 billion yen in fiscal 2010. Current lines of business are forecasted to expand to 90 billion yen, an 80% increase over the fiscal 2005 figure of approximately 50 billion yen (forecasted), and new business areas will account for sales of 10 billion yen (forecasted).

Press Contact Sekisui Chemical Co., Ltd. Corporate Communication Department Fax: (+81) 3-5521-0510

Disclaimer This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.