January 15, 2008
Sekisui Chemical Co., Ltd.
Daiichi Pure Chemicals Co., Ltd.

Formulation of the Medium-Term Business Vision for Sekisui Medical Co., Ltd.

SEKISUI CHEMICAL CO., LTD. (President: Naotake Okubo, hereinafter Sekisui Chemical) and its wholly owned subsidiary Daiichi Pure Chemicals Co., Ltd. (President & CEO: Mutsumi Fukuda, hereinafter Daiichi Pure Chemicals) have formulated the medium-term business vision for Sekisui Medical Co., Ltd. (hereinafter Sekisui Medical), which will begin operations in April as part of the Sekisui Chemical group.
As the "primary medical business company" of Sekisui Chemical group, Sekisui Medical will seek to expand the group's presence in the medical industry by growing its businesses on a global basis, centered on diagnostic reagents, in which it is highly competitive. In addition, it will provide strong support for business expansion in the medical business, which the Sekisui Chemical group considers one of its strategic businesses, through aggressive strategic investment in the future.

About the Medium-Term Business Vision for Sekisui Medical (covering the fiscal years 2008 - 2011)

1. Background
Seeing the prospects for future growth in the medical business, which it considers one of its strategic businesses, Sekisui Chemical acquired Daiichi Pure Chemicals on October 2, 2006, making the latter company a wholly owned subsidiary. Since then, it has been studying business strategies to maximize the strengths of and synergies between both companies, through integrating Sekisui Chemical's raw materials and fundamental technologies centered on the field of polymer technologies and its sales capabilities overseas with Daiichi Pure Chemicals' superior development and production technologies, centered on the field of diagnostic reagents, and its sales and marketing capabilities.
On May 17, 2007, Sekisui Chemical decided to consolidate the medical products business of its High Performance Plastics Company with Daiichi Pure Chemicals effective April of this year, and on September 10 it decided to name the new consolidated company Sekisui Medical. Then, on January 11 of this year the first step toward formal establishment of Sekisui Medical on April 1 of this year was taken as Sekisui Chemical and Daiichi Pure Chemicals concluded a company spin-off and merger agreement following approval by the Board of Directors of Sekisui Chemical on the same day.

2. Business Policies
Building a Leading Global Medical Company through Selection and Concentration of Businesses
Based on its business policies of building a leading global medical company through "selection and concentration of businesses," Sekisui Medical will seek to grow its businesses by concentrating investment of management resources on the two sectors of diagnostics and medical care and aggressively deploying overseas the products in which it has the top market share in Japan. It aims to achieve sales of 50 billion yen (nonconsolidated sales for Sekisui Medical alone) in the fiscal year 2011.

3. Business Strategies
1) Selection and Concentration of Business

To demonstrate the strengths and competitive abilities of Sekisui Medical to the maximum extent, the company will reorganize its businesses - consisting of medical products business of Sekisui Chemical (five business areas) and the four business areas of Daiichi Pure Chemicals, for a total of nine business areas - to specialize primarily in two business sectors (those of diagnostics and medical care) and four business areas (those of diagnostic reagents, diagnostic equipment, medical care, and pharmacokinetics), transferring to other companies the medical materials business of Sekisui Chemical and the regents and fine chemicals research of Daiichi Pure Chemicals. It will work to grow its businesses by concentrating investment of management resources in these sectors.


2) Business Growth Strategies

(1) Diagnostics Sector

1.	Expanding Product Lineup in Five Areas of Focus
	Five areas of focus (biochemistry, blood coagulation, diabetes, infectious diseases, and advanced technologies) have been identified in the primary business field of diagnostic reagents. Sekisui Medical will invest research and development funding aggressively in these areas (raising the amount invested by 1.5 times from FY 2007 to FY 2011) to expand its product lineup. In doing so, it seeks to achieve the top market share in Japan in the three areas of blood coagulation, diabetes, and infectious diseases.
2.	Strengthening Competitive Abilities in Latex Diagnostic Reagents
	In the area of latex diagnostic reagents, Sekisui Medical will seek to double its sales in Japan and achieve the top market share in the Japanese market in four years by working to strengthen its competitive abilities through fusion of the highly competitive latex particle technologies of Sekisui Chemical, based on its advanced particle technologies, and the superior diagnostic reagents development technologies (latex turbidimetric immunoassay [LTIA] technologies) of Daiichi Pure Chemicals.
3.	Advancing the Diagnostic Reagents and Analytical Equipment Businesses Together
	Sekisui Medical will respond to the broad-ranging needs of its customers by expanding its lineup of specialized analytical equipments in its areas of focus from the current number of four models to eight models, providing both diagnostic reagents and a variety of analytical equipments ranging from small- to large-sized models.
4.	Enhancement of Overseas Facilities
	Sekisui Medical will expand its sales overseas by employing overseas facilities such as the eight overseas sales companies of Sekisui Chemical's High Performance Plastics Company to sell the highly competitive products in which Daiichi Pure Chemicals already has the top market share in Japan and by growing its number of representatives resident in overseas. In addition, plans call for the establishment of Sekisui Medical sales facilities in Europe and North America during the fiscal year 2008. As a result, the company intends to expand the overseas sales percentage from 17% (FY 2007) to 30% (FY 2011).
5.	Reinforcement of the Productivity and Integration of Development and Production Processes
	A new production building - constructed at a cost of approximately 500 million yen - will start operations in March 2008 at the Tsukuba Factory, which is the main plant for diagnostic reagents. This will grow the productivity for diagnostic reagents by 170%, enabling it to respond to massive growth in overseas demand. The company also will consolidate its diagnostic reagents production facilities in the Tsukuba region (in a complex featuring both factory and R&D facilities), both to achieve higher levels of efficiency and to integrate operations from development of raw materials (latex particles) and productions of the products.

(2) Medical-Care Field

1.	Growing the Proto-Pharmaceutical Business through Strengthening Chiral Synthesis Technologies
	In the pharmaceuticals business, Sekisui Medical will seek to expand the amount of orders it receives for production of proto-pharmaceuticals and intermediary pharmaceutical products across a wide range of markets from experimental drugs through drugs already on the market, by strengthening its approach toward customers such as the R&D sections of major pharmaceuticals firms in Japan and around the world through strengthening its chiral (compound) synthesis technologies - one of its core technology areas and essential to pharmaceutical production.
2.	Beginning Full-Fledged Business Operations in New Contract Research Using Chimeric Mouse with Human Hepatocyte
	In the pharmacokinetics business, Sekisui Medical will begin full-fledged business operations of contract research using the new technology of chimeric mouse with human hepatocytes. This technology will contribute to increasing development speed and reducing costs in the pharmaceutical development researches of pharmaceutical companies in Japan and around the world, by providing data on pharmacokinetics (absorption, distribution, metabolism, and excretion) in the human body and on toxicity for medical compounds considered as candidates for use in pharmaceuticals.
3.	Building a Foundation for Overseas Business
	By increasing the number of personnel assigned to overseas operations and establishing new overseas facilities, centered on Europe and North America, Sekisui Medical will build routes for receiving orders of contract researches from overseas pharmaceuticals firms.

3) Strategies for Improving Business Efficiency

To improve the efficiency of its business operations and realize the effect of synergy, Sekisui Medical will restructure its facilities in Japan as outlined below.

•	R&D Facilities: Three facilities (before consolidation: four facilities)
	The two R&D facilities for diagnostic reagents (located in Ryugasaki-shi, Ibaraki Prefecture and Shimamoto-cho, Osaka Prefecture) will be consolidated (in a complex featuring both factory and R&D facilities) in the Tsukuba region (in Ryugasaki-shi), in an effort to increase development speed and maximize synergies through consolidation of management.
•	Production Facilities: Three facilities (before consolidation: four facilities)
	As with the R&D facilities described above, two production facilities for diagnostic reagents will be consolidated in the Tsukuba region to improve production efficiency.
•	Sales Facilities: Seven facilities (before consolidation: nine facilities)
	Efficiency will be improved by consolidating the sales facilities in Tokyo and Osaka.

4. Management Targets
Through the efforts described above, Sekisui Medical seeks to achieve sales of 50 billion yen and 18% increase in operating profit ratio in the fiscal year 2011.

Unit: 100 million yen

Note 1: Amortization of goodwill in connection with the acquisition of Daiichi Pure Chemicals will be conducted by Sekisui Chemical separately.
Note 2: Figures for FY 2007 represent the simple aggregation of nonconsolidated Sekisui Chemical figures for the medical products business and consolidated figures for Daiichi Pure Chemicals.

5. Synergy Targets
The sales synergy target for achievement through consolidation is 5 billion yen (for FY 2011). Cost synergies in operating profit, resulting from improved efficiency, are projected to total 300 million yen per year.

<References>
Overview of Sekisui Medical Co., Ltd. (planned, as of April 1, 2008)

(1)	Name	:	Sekisui Medical Co., Ltd.
(2)	Headquarters	:	KDX Nihonbashi 313 Building, 3-13-5 Nihonbashi, Chuo-ku, Tokyo, Japan
(3)	Representative	:	Mutsumi Fukuda, President & CEO
			(Also serves as a Director of Sekisui Chemical and General Manager of the Medical Products Division of Sekisui Chemical's High Performance Plastics Company)
(4)	Capital	:	1,275,000,000 yen
(5)	Shareholder	:	a wholly owned subsidiary of SEKISUI CHEMICAL CO., LTD.
(6)	Number of employees	:	840

Organizational Outline

(1)	Diagnostics sector (diagnostic reagent and diagnostic equipment business)
(2)	Medical care sector (pharmaceuticals and pharmacokinetics businesses)
(3)	R&D sector
(4)	Operations and administration sector

Schedule for the Start of the New Company

September 11, 2006	Sekisui Chemical announces its acquisition of Daiichi Pure Chemicals, a subsidiary of Daiichi Pharmaceutical Co., Ltd.
October 2, 2006	Sekisui Chemical acquires all shares of stock in Daiichi Pure Chemicals, making the latter a wholly owned subsidiary
May 17, 2007	Decision made on merger of Sekisui Chemical's medical products business with Daiichi Pure Chemicals, effective April 2008
September 10, 2007	Decision made to name new merged company Sekisui Medical
January 11, 2008	Sekisui Chemical and Daiichi Pure Chemicals conclude a company spin-off and merger agreement
January 15, 2008	Medium-term business vision for new merged company Sekisui Medical formulated
April 1, 2008	Sekisui Medical begins operations