FOR IMMEDIATE RELEASE

Kurita Water Industries Reports Earnings For The Year Ended March 2004
Tokyo, JapanMay 11, 2004 -- Kurita Water Industries Ltd. (TSE Security Code 6370)

announced Fiscal 2003 revenue of 146.819 billion yen and earnings of 8.444 billion yen
or 64.60 yen per share.
Summary of Operating Results
Total consolidated orders for the Kurita Group increased 16.6% for the year to 149.735
billion yen, and net sales increased 3.7% to 146.819 billion yen. As a result, operating
income increased by 9.6% to 13.490 billion yen and ordinary income grew by 12.4% to13.938 billion yen, producing a net income increase of 54.2% to 8.444 billion yen. By
segment, significant growth in the Company’s water treatment facilities businesscentering on demand from the electronics industry offset declining demand in generalindustries and public segment, and was the main contributor to the growth in operating
income for the period. Earnings per share, based on 128,584,628 shares outstanding,were 64.60 yen for the period vs. 40.67 yen for the previous year.
Overall, Japan’s economy began to show signs of recovery from the second half of theyear, with a recovery in corporate profits and a slight improvement in personal
consumption. The operating environment for the Kurita Group was characterized by afavorable recovery in water processing-related demand in the electronics industries ofJapan, China, Taiwan and South Korea, while business conditions for water
processing-related demand from the public works and other sectors remain severe andhave shown no signs of recovery.
Reflecting the business performance for the year and from the perspective of
maintaining a stable dividend payout to shareholders, the Company plans to propose a
8 yen dividend per share for the end of the fiscal year, which along with an interim
dividend of 8 yen per share will produce an annual dividend of 16 yen per share.

Segment Information
Water Treatment Chemicals
Total Group orders for the division increased by 2.3% for the year to 47.516 billion yen,while sales grew 0.7% to 47.442 billion yen, and produced operating earnings growth of
2.3% to 6.640 billion yen.
During the year, business conditions improved as corporate profits in general staged amild recovery and factory operating ratios recovered. Yet continued cost reduction
efforts by the Company’s clients as well as competition with other firms in the industry
continued to produce a tough operating environment. In response, the Company
aggressively worked to gain and expand the volume of orders; through the developmentof competitive products, by developing closer relationships with its clients, bydeveloping more regionally focused marketing, through more solutions-based sales
aimed at meeting customer needs, and by offering management services related towater treatment. Moreover, the Company worked to further ensure revenues andearnings growth by pursuing cost savings in terms of procurement and manufacturing
processes.
In terms of orders, there was a slight decline in the Company’s mainstay products
including boiler water treatment chemicals, cooling water chemicals and waste water
treatment chemicals, while this decline was offset by increases in process chemicals
used in the paper and pulp industry, agents for solidifying heavy metal contained in thefly ash given off during waste incineration, and management service related to water
treatment.
Water Treatment Facilities
Total Group orders for the division saw strong growth of 24.7% for the year to 102.218
billion yen, while sales grew 5.1% to 99.377 billion yen, and operating earnings
increased 19.5% to 6.845 billion yen.
The market for water treatment facilities during the year was characterized by strong
demand related to active capital investment in the domestic and overseas electronics
industry, given expanding markets for such products as digital cameras, flat panel

displays and camera-equipped mobile phones. However, business conditions remained
severe in other segments of the water treatment facilities market.
During the year, the Company worked to reduce the environmental burden of its clientswith expanded marketing of proposal-based solutions, focused sales to its major clients,
and in ensuring as well as increasing the number of projects. Moreover, effort was madeto improve profitability with ready-made system to improve the productivity ofproduction processes to reduce costs, while the start-up of the ultra-pure water supply
business also contributed to stabilizing revenues and earnings.
In terms of orders, large increases were seen in orders for ultra-pure water treatment
facilities from the electronics industry, while favorable growth was seen in maintenanceservices and tool cleaning services used in semiconductor and liquid crystal display
production equipment.
On the other hand, orders in the general industries segment saw large declines inorders from the food, pharmaceuticals, basic materials and automobile segments, aswell as the electric power segment. This notwithstanding, while the market for soil
remediation has become increasingly competitive, the Company was able to ensure
growth in orders by leveraging the collective strengths of the Group.
Conversely, business conditions in the public works market remained severe, given
ongoing budget reductions by both national and regional governmental organizations.
In response, the Company worked to leverage the collective strengths of the Group tobetter understand and present appropriate solutions for client needs, focusing on
expanding orders for human waste treatment facilities, proposals for the renewal ofexisting facilities, and products to reduce the amount of sludge.
Orders in the sewage treatment facilities market declined owing to intensifiedcompetition. However, sharp growth was seen in the human waste treatment facilitiessegment due to a major facility renewal project.

Outlook for the Coming YearOverview
For the fiscal year to March, 2005, the Company is projecting consolidated net sales of
161.8 billion yen, ordinary income of 17.4 billion yen and net income of 10.0 billion yen,representing increases of 10.2%, 24.8% and 18.4% respectively.
Japan’s economy is expected to continue recovering mildly, but the environment is suchthat continued caution is warranted. Kurita will continue working to expand its
business and revenues by accelerating the establishment of a new business model thatfocuses on outsourcing business, client solution-oriented marketing and sales, andenhanced cost competitiveness.
Outlook by Segment
In water treatment chemicals, while client factory operating ratios are expected tocontinue improving mildly, ongoing cost-cutting efforts as well as competition fromother firms in the industry mean that industry operating conditions will remainchallenging. Kurita will endeavor to ensure order inflows and revenue growth byreorganizing its sales organization for more regionally-focused sales efforts and betterclient relationship management, while at the same time providing customer
solutions-based proposals and better collaboration with the maintenance arm of thewater treatment facilities division.
As for water treatment facilities, it is difficult to foresee a sharp increase in new capital
investment in either the private sector or the public sector. In the private sector, there
has been a noticeable recovery in domestic as well as overseas electronics markets, andthe concern is that related capital expenditures may be facing a peaking out of the cycle,
given historical trends. This notwithstanding, the Company will continue to focus onaggressively promoting orders by emphasizing proposals that more fully leverage thestrengths of the Group in areas such as ultra-pure water supply.
In general industry segments such as food, pharmaceuticals, basic materials,
automobile and electric power, no major improvement is foreseen in currently severemarket conditions, but the Company nevertheless intends to implement strategies toensure stable orders and revenues, such as the further penetration of major markets,and a further strengthening of its competitive position with ready-made products. In
the soil remediation segment, the Company will endeavor to expand its businessthrough new services designed to hedge the risks associated with soil pollution andhighly competitive remediation technologies in conjunction with its subsidiary, Land
Solutions Co., Ltd.
In the public sector, the shrinkage in public works investment is expected to continue,
further exacerbating already tough market conditions. The Company will be working tocapture order and revenue flow from the upgrading and renewal of human waste
treatment facilities, tap water purification with advanced membrane technology, andsludge reduction system.
Medium-Term Strategies
Kurita Water is exerting Group-wide efforts to expand into new business domains andinto overseas markets, and is implementing the following strategies in this effort.
During the past year, the Company focused on;a) Expanding the business domains of both its offensive and defensive businesses.
b) Expanding its overseas business in China and the rest of Asia, utilizing the newbusiness models the Company is developing for the Japanese market.
c) Developing new energy-related businesses it believes will become the next corebusiness.
Business Risks
In terms of the major variables that could affect the Company’s future performance;a) Business performance and demand in the water treatment chemicals segment isaffected by factory operating ratios at major clients in industries such as steel,petroleum, and paper and pulp.
b) Demand for water treatment facilities is dependent on capital expenditure trends inindustries such as electronics, food, pharmaceuticals, basic materials and automobile.
In addition, performance of the Company’s water treatment facilities business for thepublic sector is influenced by the financial condition and budgeting actions of nationaland local governments which affects demand for these products.
c) While international political uncertainties do give cause for concern regarding
exposure to exchange rate fluctuations, because overseas sales and earnings are a
relatively small part of the Group’s overall sales and earnings (at less than 11% totalsales) the impact of exchange rate fluctuations is limited.
Cash Flow Trends
In terms of consolidated cash flows for the period under review, the balance of cash andcash equivalents at the end of the period was 35.137 billion yen, up 11.5% and 3.63
billion yen higher than at the end of the previous year.
Operating cash flow declined by 4.828 billion yen to 5.574 billion yen. Factors
contributing to operating cash flow were pretax profits of 14.918 billion yen anddepreciation expenses of 3.872 billion yen, while the major items representing cash
outflow were in increase in notes and accounts receivables of 7.202 billion yen that wererelated to the increase in net sales and corporate and other tax payments of 5.829
billion yen.
Cash flow from investing activities was 0.146 billion yen, and represented a decline of
6.853 billion yen from the previous year. This largely reflected a 6.695 billion yen cash
inflow from the sale of marketable securities, and a net cash inflow of 1.780 billion yen
from the sale and purchase of investment securities, as well as a cash outflow of 8.364
billion yen related to the purchase of fixed operating assets.
Cash flow from financing activities was down by 4.55 billion yen for the year to 1.72
billion yen. This reflected a cash inflow from overseas subsidiary borrowings of 0.358
billion yen, and a cash outflow of 2.089 billion yen for dividend payments.

About The Kurita GroupThe Kurita Group provides a wide range of products, technologies, and maintenanceservices related to water treatment.

The two core lines of the Group’s business consistof: 1) water treatment chemicals used for boiler water, cooling water, waste water, andin manufacturing processes; and 2) water treatment facilities such as ultra-pure water
systems, waste water treatment facilities, and sewerage water treatment facilities. The
business scope of both lines includes production, sales, and maintenance services. Foradditional information about the Kurita Group, visit the Company's website atwww.kurita.co.jp.
Except for historical information contained herein, matters discussed in this news
release may contain forward-looking statements that involve risks and uncertainties as
discussed earlier in Business Risks section.

KURITA WATER INDUSTRIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(in million yen)
Year Ended March 2004

Previous Fiscal Year

(April 1,2003 to(April 1,2002 to

March 31, 2004)

March 31, 2003)

AmountAmount% of
Net Sales

Increase(Decrease)% ofAmountNet Sales

Net Sales

146,819100.0

141,628

100.0

5,191

Cost of Sales

101,433

69.1

97,846

69.1

3,587

Gross Profit

45,38630.9

43,781

30.9

1,605

Selling, General and

31,89521.7

31,47422.2

421

Operating Income

13,4909.2

12,3078.7

1,183

Non-operating Income

1,034

0.7

1,012

0.7

22

Non-operating Expense

586

0.4

919

0.6(333)

Ordinary Income

13,9389.5

12,4008.8

1.538

Special Gains

1,479

1.0--1,479

Special Losses

499

0.3

2,136

1.5(1,637)

Income before Income Taxes

14,918

10.2

10,263

7.3

4,655

Income Taxes6,346

4.3

4,674

3.3

1,672

126

0.1

112

0.1

14

8,444

5.8

5,476

3.9

2,968

Administrative Expenses

Minority Interests in Earnings
of Consolidated Subsidiaries
Net IncomeCONDENSED CONSOLIDATED BALANCE SHEET(in million yen)
Year Ended March 2004

Previous Fiscal Year EndIncrease(as of March 31, 2004)(as of March 31, 2003)(Decrease)

Cash and Deposits

35,512

31,838

3,674

Notes Receivable - Trade

10,607

10,255352

Accounts Receivable - Trade56,07449,442

6,632

Marketable Securities

6,720

6,615

105

Inventories

6,713

6,301

412Deferred Tax Assets

2,070

1,806

264

Other

1,365

1,090

264

Allowance for Doubtful Accounts

(140)

(169)

29

118,923

107,180

11,743

Tangible Fixed Assets

41,671

38,3103,361Intangible Fixed Assets

3,347

2,659

688

Investment & Other Assets

19,67825,538(5,860)Total Fixed Assets

64,69766,508(1,811)

Total Assets

183,620

173,689

9,931

Notes Payable - Trade

1,371

1,420

(49)

Accounts Payable - Trade

25,517

22,841

2,676

48

7

41

Outstanding Payments/Expenses

7,128

6,391

737

Income Taxes Payable

3,593

3,335

258

Advances received

1,373

966

407

Accrued Employees’ Bonuses

2,173

2,154

19

Allowance for product warranty

1,028

848

180

718

675

43

42,95438,643

4,311[Assets]
Current Assets

Total Current Assets

Fixed Assets[Liabilities]
Current Liabilities

Short-term borrowings

Other
Total Current Liabilities

Fixed Liabilities
Long-term borrowings

349

40

309

9,149

11,469(2,320)

658

813

(155)

800

796

(4)

10,95813,120(2,162)53,912

51,763

2,149

1,031

956

75

Common Stock

13,45013,450-Additional Paid-in Capital

11,398

11,398-Retained Earnings

108,180

101,637

6,543

(257)

20(277)

1,625

(108)

1,733

(829)

(543)

(286)

(4,890)(4,885)(5)

128,676

120,969

7,707

183,620

173,689

9,931

Accrued Employees’ Retirement
Benefits
Accrued retirement benefits for
directors and corporate auditors
Other
Total Fixed Liabilities
Total Liabilities
Minority Interests
Minority Interests[Shareholders’ Equity]

Unrealizedgains(losses)onrevaluation of land
Revaluation Surplus of Other
Securities
Foreign Currency Translation
Adjustments
Treasury Stock
Total Shareholders’ Equity
Total Liabilities, Minority
Interests and Shareholders’ equity

CONSOLIDATED STATEMENTS OF CASH FLOWS(in million yen)
Year ended

Previous

March 2004

Fiscal Year

(April 1,2003 –(April 1, 2002 –March 31, 2004)

March 31,2003)

AmountAmountCash flows from operating activities
Income before Income Taxes

14,918

10,263

Depreciation and amortization

3,872

3,208

(2)

0(208)(143)(2,317)

592

Increase (Decrease) in allowance for doubtful accounts

73(52)

Increase (Decrease) in other allowance

45(708)Interest and dividend income(409)(417)

Other non-operating income(402)(430)

Interest expense

27

17

Other non-operating expenses and special losses

354

742

(1,414)824

Loss on revaluation of tangible fixed assets

499-(Gains) Losses on sale/disposal of tangible fixed assets

(57)

226

(7,202)(4,076)(Increase) Decrease in inventories

(442)

1,369

Increase in other current assets

(327)

(14)

Increase in notes and accounts payable, trade

2,995

1,771

Increase (Decrease) in advances received

409

(708)

Increase (Decrease) in other current liabilities

636

(341)

Bonus paid to directors and corporate auditors

(118)

(120)

(1)

28

10,927

12,028Interest and dividend received

482

609

Other non-operating income received

408

430

Amortization of consolidation goodwill
Equity in earnings of unconsolidated subsidiaries andaffiliates
Increase(Decrease)inallowancefor

employees’

retirement benefits(Gains)

Lossesonsale/revaluation

ofinvestment

securities

Increase in notes and accounts receivables, trade

OtherSub total

Interest paid

(27)

(17)

Other non-operating expenses paid

(388)

(590)

Income taxes paid

(5,829)(2,058)Net cash provided by operating activities

5,574

10,402

Deposits into time deposit accounts

(507)

(194)

Withdrawals from time deposits

431

272

Payments for purchases of marketable securities(200)(1,483)

Proceeds from sale of marketable securities

6,695

5,100

Payments for purchases of tangible fixed assets(8,364)(4,895)

Proceeds from sale of tangible fixed assets

1,183

251

Payments for purchases of investment securities(2,212)(7,877)

Proceeds from sale of investment securities

3,992

1,973

Other expenses(1,642)(1,140)

Other income476

993

Net cash used in investing activities(146)(6,999)Proceeds from short-tem borrowings-150

Repayment of short-term borrowings-(207)

Proceeds from long-term borrowings

358

2

Repayment of long-term borrowings

(12)

(13)

Acquisition/sale of treasury stock(4)(4,058)Other income

28-(2,089)(2,145)(1,720)(6,270)

(127)

(59)

Net Increase (Decrease) in cash and cash equivalents

3,580(2,927)

Cash and cash equivalents at beginning of year

31,50732,98050

1,454

35,13731,507

Cash flows from investing activities

Cash flows from financing activities

Dividends paid (including dividends paid to minoritystockholders)
Net cash used in financing activities

Effect of exchange rate changes on cash andcash equivalents

Cash and cash equivalents of newly consolidated
Subsidiaries at beginning of year
Cash and cash equivalents at end of year

========= =========SOURCE: Kurita Water Industries, Ltd.
CONTACT: Kurita Water Industries, Ltd.
Corporate Communications Section
ir@kurita.co.jp<END>