Sumitomo Chemical Pursues “Selection and Concentration” Strategy inIT-Related Chemicals Sector
Tokyo: June 3, 2004 --- Moving to implement the “Selection and Concentration” policy set
forth in the company’s Three-Year Corporate Business Plan beginning fiscal 2004,
Sumitomo Chemical will divest its epoxy resins business and strengthen the liquid crystal
polymers production thereby more clearly focusing resources within the IT-related
chemicals fields on display materials for electronic components. At the same time, theCompany will initiate organizational changes to further enhance customer service,including quality assurance systems, and expand the capability of its IT-related Chemicals
Research Laboratory.
(1.) In regard to operational restructuring:
1. The Company will increase the annual production capacity of liquid crystal
polymers at its Ehime plant to 6,000 tons, or double the current capacity of
3,000 tons in two steps by the end of 2007. (Separately, the Company runs aplant of liquid crystal polymers with annual production capacity of 1,000
tons at Taoka Chemical Co.) This is in preparation for an expected
substantial increase in global demand for liquid crystal polymers for use indevices such as bobbins for the backlights of liquid crystal televisions.
Construction has already started for the initial phase of the plant expansion,
which will raise annual capacity at the Ehime plant to 4,500 tons by thespring of 2005.
2. The Company will transfer its business of ortho-cresol novolac epoxy resins(Production capacity : 7,500 tons per year) for the encapsulation ofsemiconductors to ChangChun Plastics Co., one of the leading companies in
the field, headquartered in Taipei, Taiwan. The transfer will include the fullrange of its technical expertise in the field. Personnel and othermanagement resources engaged in this business will be utilized in theCompany’s strategic business such as display materials.
(2.) In regard to organizational changes, the Company will create a new organization in
July strengthening the company’s quality assurance system in the IT-related
Chemicals Sector. At the same time, the name of a business division in the Sector
will be changed as described below. The changes will promote its ability toprovide material solutions that meet the expectations of customers and highlightpriority business areas in acceleration of its policy of “Selection andConcentration.”(newly created)

Quality Assurance Office
IT-related Chemicals Sector(Present division name) Semiconductor Process Materials Division(New division name) Semiconductors & Display Materials DivisionÆ(3.) In order to strengthen the research of optical functional films and accelerate
development of component materials and processing technology and further
promote customer-oriented research and development, the Company will construct
a new research facility on the site of the Ehime Work by the spring of 2005. The
plan includes the installation of the latest cutting-edge equipment for trial
manufacture and product assessment and increase of research personnel by 50%
during the period of the Three-Year Corporate Business Plan, enabling theCompany to respond to the customers’ needs in a precise and timely manner.
Sumitomo Chemical has been aggressively investing in color filters, optical functionalfilms, photoresists, liquid crystal polymers, and other areas within the IT-related
Chemicals Sector. In line with its Three-Year Corporate Business Plan, the Company
will continue to promote its “material solutions business,” focusing on the developmentof downstream products with higher added value. At the same time, the Company will
allocate its management resources in the most optimal manner based on our “Selectionand Concentration” policy and further strengthen its strategic and dynamic businessdevelopment. The operational restructuring measures, organizational changes andinitiatives to strengthen research capability described above will accelerate theCompany’s efforts to implement business to meet higher customer satisfaction.