Summary of the Q&A Session at the Financial Results Briefing
for the Fiscal Year ended March 31, 2018

Date and Time:May 2, 2018 (Wed.) 15:00 - 16:00

Venue:

Belle Salle Yaesu

Notice: This summary is a reference designed for the convenience of those who
could not attend the financial results briefing stated above. Please note that thisis not a word-for-word transcript of all remarks made at that session, but is asummary prepared by Kurita Water Industries Ltd.

Q. With regard to improving the profitability of the existing businesses, as statedin the new medium-term management plan, how have you factored in theimpact of synergies from previous acquisitions in the Water Treatment
Chemicals business? Also, how do you plan to improve profitability while also
increasing sales going forward?
A. We view improvements to profitability, for both the domestic and overseas
businesses, as a major challenge that was not fully achieved during the previous
medium-term management plan, CK-17. In April 2017, we integrated thedomestic Water Treatment Chemicals and the Maintenance Service businesses
into a single organization. This led to new types of contract business in the 2H ofthe fiscal year ended March 31, 2018. Our aim is to improve domestic
profitability by providing our customers with added value for which we will beappropriately rewarded. For the overseas business, we leverage products andservices where the Kurita group has strengths, to serve customers that operate
globally with a one-stop approach.
One example of the positive benefits from M&A is the development ofapplications that leverage the film forming amine technology of our European
subsidiary, which has led to the emergence of a new market. We aim toimprove profitability by accelerating the commercial launch of technologies andproducts where we have competitive superiority.
Q. With regard to the growth investments for the Ultra-pure Water Supply(UPWS) business, how are you thinking about expanding your customer base?
A. At the time I became president, I did say that I wanted to pursue overseas

1/4business opportunities for the UPWS business. However, given the preferenceof Chinese customers to take advantage of subsidy programs for investments,
we recognize it would be challenging to apply the current business model in
China as is. That said, we have been able to establish a track record in South
Korea. In Japan, our aim is to attract new customers by modifying the current
structure, focusing on the value proposition of the UPWS model, which
contributes to production stability and the overall production process. We
hope this will create opportunities for new investments.
Q. Are you thinking about applying a modified model to industries other thanelectronics?
A. Target industries would be semiconductors and electronic components. For
other industries, we would like to offer waste water recovery services orcompact ultra-pure water supply services.
Q. My impression is that you are aiming to return to previous levels with themedium-term management plan OPM target of 15% and ROE target ofgreater than 10%. Do you view these targets as conservative or challenging?
A. I believe these are challenging targets. Both the external operating
environment and our business structure have changed, so getting back toprevious levels will not be easy. We will not be able to achieve our targets
without moving away from simply selling individual products in favor ofproviding services, or making fundamental changes to our business model.
Q. What is the biggest risk to achieving your targets? Is the overseas businessthe biggest challenge?
A. A major risk would be our inability to change our business model. I believe that if weare not able to make major changes at an early stage of the 5-year period, then it
will be impossible to achieve our targets. I believe the overseas business will function
as a platform, and therefore, do not consider it a risk.

Q. When you talk about a review of the business portfolio, what are you
specifically considering?
A. Businesses, either domestic or overseas, that would be targeted for review
are those where there are structural barriers to improving profitability, or
where it would be difficult to change the sales approach.

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Q. What is your view of why you saw a significant overshoot in FY ended March
31, 2018 orders from the electronics industry in Asia?
A. We were aware of the strong investment trends in FPD, but this coincided withstrong end-market demand in semiconductors, which led to a surge in projects
with short turnaround times concentrated at around the same time. The strong
order trend at Kurita reflects the high value our customers place on ourtechnological expertise and our proactive response to the opportunity.
Q. Will we see a continuation of this trend in FY ending March 31, 2019?
A. We would expect to see a moderation in the pace of FPD investments. We also
expect Chinese semiconductor investments to slow, but believe that investment
appetite for semiconductors remains strong in South Korea.
Q. Is the scale of inquiry levels unchanged from six months ago?
A. It is down overall, but there have been a number of projects where we havebeen able to leverage our superiority.
Q. Will the tightening of environmental regulations on waste water in China be abusiness opportunity?
A. Yes, of course. That said, there is significant variance in waste water needs byindustry. If we were to see an increase in sophisticated projects such as waste
water reclamation, then there would be promising business opportunities.
However, simple waste water treatment projects would not create attractive
opportunities.
Q. You are targeting a \1 billion increase in operating profits for the Water Treatment
Chemicals business in FY ending March 31, 2019. Please talk about SG&A and theimpact of making an equity-method affiliate in South Korean into a subsidiary.
A. We expect the impact of consolidating Hansu Co., Ltd. will be slightly less than \9billion at the topline and several 100 millions of yen at the operating profit level(post-goodwill amortization). For SG&A, we expect an increase of \3.7 billion for
the Water Treatment Chemicals business as a whole, of which \2.4 billion will
come from the consolidation of Hansu Co., Ltd.
Q. For your operating profit forecast for the Water Treatment Facilities business,
could you discuss the breakdown between the electronics industry andgeneral industries?

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A. We expect overall segment operating profit to rise \0.5 billion. The vast majority of theincrease will come from the electronics industry although we do expect a modest
improvement from general industries.
Q. From FY ending March 31, 2019, you changed the consolidation term of youroverseas subsidiaries from January to December to April to March. How much was
Water Treatment Facilities sales in the January to March 2018 quarter?
A. More than \6 billion.
Q. With the margins on the overseas Facilities business improving and growth in
the Maintenance Service business, why are you expecting the profit margin
for the Water Treatment Facilities business to deteriorate?
A. With production capacity running at extremely tight levels, we are taking aslightly conservative view on the profitability of the general industry business.
Q. Please talk about capacity levels for the Water Treatment Facilities businessfor the electronics industry in FY ending March 31, 2019. How much moreroom do you have?
A. We are already running at very tight levels. For the electronics industry,
setting aside projects where we replicate existing designs, if we build facilities
from scratch, generating an additional \10 billion would be difficult. This fiscal
year, we are reviewing our production capacity as well as promoting initiatives
to improve design efficiency. This should give us more room in production
capacity going forward.

Q. When you achieve the overall OPM target of 15% in 5 years' time, what
would be your image of the individual operating margins for the Water
Treatment Chemicals and Water Treatment Facilities businesses?
A. Over the next 5 years, it is possible that the distinction between the twosegments could blur but I believe Water Treatment Chemicals will definitely
be at 15%. For Water Treatment Facilities, as the proportion of EPC inquiries
declines, I believe that we can achieve an operating margin of close to 15%.

Results forecasts presented and other statements relating to the future made in thisdocument are based on information currently available and certain assumptions theCompany considers reasonable. A variety of factors may cause actual financial
results and other forward-looking statements to differ materially from the forecasts.

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