Creative Hybrid Chemistry
For a Better Tomorrow
November 30, 2010
Hiroshi HirosePresident

Table of Contents
Overview of FY 2010 Performance
P1

FY 2010 First Half Results

P2

FY 2010 Full-Year Forecast

P3

FY 2010 Full-Year Forecast by Sector

P11

Major Initiatives by Sector

P12

Major Investments made under ourCorporate Business Plan FY 2007-2009
and Current Status

Progress of Major Projects
P13

Improving the Performance of RabighPhase I

P14

Progress of Rabigh Phase II

P15

Maximizing Synergies with Nufarm

P16

Launch of Latuda (lurasidone) and Sales
Projections

P17

Initiatives to Commercialize PLEDs

Overview of Corporate Business Plan FY 2010-2012
P4
P5Corporate Vision and Long-Term Business
Environment Outlook
Business Portfolio Strategy

P6

Seven Priority Initiatives and Performance Targets

P7Performance Trends and FY 2012 PerformanceTargets

Progress on Our Corporate Business Plan

Enhancing Financial Strength

P8

FY 2010 Forecast and FY 2012 Targets

P18

P9FY 2010 Forecast and FY 2012 Targets by Sector

P10 Factors Contributing to Growth in Operating

Income: FY 2012 vs. FY 2010
13th Nomura Investment Forum 2010

Enhancing Financial Strength

Shareholder Returns
P19

Dividend PolicyOverview of FY 2010 Performance

FY 2010 First Half Results
FY 2009.1H

FY 2010.1H

Change¥735.2 billion¥989.2 billion+¥254.0 billion¥11.2 billion¥53.0 billion+¥41.9 billion¥7.8 billion¥52.1 billion+¥44.3 billion

Net Income- ¥3.5 billion¥2.5 billion+¥6.0 billion

Overseas
Sales

42.9%

53.5%

NaphthaPrice¥37,300/kl¥46,200/kl

ExchangeRate¥95.53/US$¥88.91/US$

Interim
Dividend¥0/share¥3/share

Sales
Operating
IncomeOrdinary
Income13th Nomura Investment Forum 20101

FY 2010 Full-Year Forecast
FY 2009

FY 2010(Forecast)

Change¥1,620.9 billion¥1,950.0 billion+¥329.1 billion¥51.5 billion¥72.0 billion+¥20.5 billion¥35.0 billion¥62.0 billion+¥27.0 billion

Net Income¥14.7 billion¥10.0 billion-¥4.7 billion

NaphthaPrice¥41,200/kl¥45,100/kl

Exchange
Rate¥92.89/US$

Full-Year
Dividend¥6/share

Sales
Operating
IncomeOrdinary
Income13th Nomura Investment Forum 2010

(2nd-half ¥44,000/kl)¥84.00/US$(2nd-half ¥80.00/US$)¥9/share2FY 2010 Full-Year Forecast by Sector(Billions of yen)

FY 2009

FY 2010

Sales

203.3

240.0+36.7O.I.

1.3

19.5

+18.2

Petrochemicals Sales& Plastics
O.I.

481.5

635.0

+153.5-0.2

10.5+10.7

Fine
Chemicals

Sales

86.7

90.0+3.3

O.I.

3.6

1.5

-2.1

IT-related
Chemicals

Sales

265.2

325.0

+59.8

O.I.

6.3

26.0+19.7

Sales

211.5

220.0+8.5

O.I.

29.3

22.5

-6.8

Sales

267.5

350.0+82.5

O.I.

29.9

13.5

-16.4

Sales

105.1

90.0

-15.1

O.I.

-18.7

-21.5

-2.8

Sales

1,620.9

1,950.0+329.1

51.5

72.0

+20.5

Basic
Chemicals

Agricultural
Chemicals

PharmaceuticalsOthers

TotalO.I.

(Forecast)

ChangeMain Factors Contributing toChange in Operating Income
Sales and operating income is expected to increase because of arise in market prices and a recovery in demand for raw materials forsynthetic fibers and methyl methacrylate.
Sales and operating income is expected to increase because of the
full-fledged contribution of the Rabigh complex, as well as higher
selling prices in Japan and higher market prices overseas.
Although sales is expected to increase because of a recovery indemand and sales promotion efforts for resorcinol, operating incomeis expected to decrease due to depreciation costs for a new plant.
Sales and operating income are expected to increase because of asignificant increase in shipments of polarizing film and color filters.
Although sales is expected to increase because of stronger
shipments of methionine, herbicides and OLYSET® Net, operating
income is expected to decrease due to the appreciation of the yenand depreciation costs for a new plant.
Although sales is expected to increase because of contributions
from US subsidiaries, operating income is expected to decrease due
to increase in amortization expenses of patent rights and otherintangible assets, as well as the impact of drug price revisions.

For comparison purposes, figures for FY 2009 have been adjusted to reflect accounting changes applied from the beginning of FY 2010.
13th Nomura Investment Forum 20103

Overview of Corporate Business PlanFY 2010-2012

Corporate Vision and Long-Term Business
Environment Outlook
Corporate Vision
I. Achieve sustainable strong growth as a stronger, more innovative global company
Accelerate the globalization of business and meet the evolving needs of markets by building on strong
R&D capabilitiesII. Contribute to the sustainable development of the global community
Meet pressing global challenges, such as improving people’s health and living standards, enhancing
energy and food security, and building a low-carbon society, by making the best use of the power ofchemistryIII. Continuously enhance the value of the company
Build on our financial strengths and achieve sustainable earnings growth to meet shareholders’expectations

Long-Term Business Environment Outlook
Outlook of the Global Economy & Business Environment in the Next 20 Years (through 2030)
Environment & Energy

Global economy to double
Emerging markets as a new growth engine
Developed markets to become more diversified
13th Nomura Investment Forum 2010

Business areas
with high growthpotential

Life Sciences
ICT4Business Portfolio Strategy
Aiming for a balanced business portfolio structure, with “bulk chemicals,” “ICT,” and“life sciences” each accounting for approximately 30% of total sales by FY 2020.
Ratio of investments in new facilities, capacity
expansions, and M&A through FY 2020
BulkOthers

ICT, Battery Materials &Fine Chemicals

Life Sciences

40%40%

Target Business Portfolioin FY 2020

FY 2009
8%Others
8%
Pharmaceuticals
17%

20%

Refinery & Others
Basic Chemicals
13%

Sales bySector

10%Petrochemicals &Basic Chemicals(Bulk)

30%

42%
50%
Agricultural Chemicals
13%

Petrochemicals
30%

IT-related
Fine
Chemicals Chemicals
16%
4%13th Nomura Investment Forum 201030%
Pharmaceuticals &Agricultural Chemicals(Life Sciences)

ICT, Battery Materials &Fine Chemicals

30%
5Seven Priority Initiatives and Performance Targets

Seven
Priority
Initiatives
4.

1.

2.

Quickly maximize profits& cash flows from majorinvestments

5.

Accelerate businessgrowth3.
Enhance financial
strength

6.
Implement Climate
Change Strategy

Strengthen global
management system

Strengthen costcompetitiveness ofcore & commodity
businesses

7.
Ensure full & strict
compliance; maintainsafe & stable operations

Performance Targets of the Corporate Business PlanFY 2012 Performance Targets (consolidated)
Sales￥2.4 trillion

Operating Income￥190 billion

Ordinary Income￥220 billion*Including equity in earnings of affiliates of ￥40 billion

Net Income
13th Nomura Investment Forum 2010

￥140 billion

Assumptions
Ex. Rate：￥90/US$Naphtha：￥50,000/kl
Crude Oil：
US$85/bbl
6Performance Trends and FY 2012 Performance Targets
Sales（Billions of yen）

3,000

2,400.0

2,500
2,000
1,500

1,296.3

1,556.6

1,790.0

1,896.5

1,788.2

FY 2006

FY 2007

FY 2008

1,950.0
1,620.9

1,0005000

FY 2004

FY 2005

FY 2009

FY 2010

FY 2011(Forecast)

FY 2012(Target)

Operating Income（Billions of yen）

250190.0

200
150

105.2

120.8

139.6
102.4

10051.5

5072.02.10
FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010(Forecast)

13th Nomura Investment Forum 2010

FY 2011

FY 2012(Target)

7

Progress on OurCorporate Business Plan

FY 2010 Forecast and FY2012 Targets
ChangeFY 2010 (Forecast)

FY 2012 (Target)

Sales¥1,950.0 billion¥2,400.0 billion+¥450 billion

OperatingIncome¥72.0 billion¥190.0 billion+¥118 billion

Ordinary
Income¥62.0 billion¥220.0 billion+¥158 billion

Net Income¥10.0 billion¥140.0 billion+¥130 billion

NaphthaPrice¥45,100/kl¥50,000/kl

ExchangeRate¥84.00/US$¥90.00/US$

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FY 2010 Forecast and FY 2012 Targets by Sector(Billions of yen)

FY 2010

FY 2012（Forecast））（Target））

Sales240.0270.0

+30.0

O.I.

19.5

17.0-2.5

Petrochemicals Sales& Plastics
O.I.

635.0

785.0

+150.010.5

30.0+19.5

Fine
Chemicals

Sales

90.0

135.0

+45.0

O.I.

1.5

16.0+14.5

IT-related
Chemicals

Sales

325.0

395.0

+70.0

O.I.

26.0

44.0

+18.0

Sales

220.0

270.0

+50.0

O.I.

22.5

48.0

+25.5

Sales

350.0

390.0

+40.0

O.I.

13.5

38.0

+24.5

Sales

90.0

155.0

+65.0

-21.5
1,950.0-30
2,400.0+18.5+450.0

72.0

190.0

+118.0

Basic
Chemicals

ChangeAgricultural
Chemicals

PharmaceuticalsOthers

O.I.
TotalSales
O.I.

13th Nomura Investment Forum 2010

Main Factors Contributing toChange in Operating Income• Increase in sales of PMMA
• Develop new applications and increase sales of alumina• Continued rationalization and reduction of procurement costs• Improve margins• Expand business in the area of high value added applications• Fully utilize our new resorcinol plant• Expand pharmaceutical chemicals business• Expand and strengthen polarizing film business• Expand photoresists business• Improve the performance of battery materials business in the short-term• Expand sales areas and enter new business fields in crop protectionbusiness• Expand household insecticides and pest control products inenvironmental health business• Expand scale of feed additives business• Launch and expand sales of Latuda (lurasidone)• Decrease in amortization and other costs related to the acquisition ofSunovion (former Sepracor)• Launch polymer organic LED materials

9Factors Contributing toGrowth in Operating Income：： FY 2012 vs. FY 2010

Factors Contributing to Growth

1. Reduced variable costs
・ Improvement of production efficency

Increase OverFY 2010
Forecast+100

2. Reduced fixed costs
・ Lower expenses for the amortization of actuarial differences inretirement benefits
・ Lower expenses for the depreciation of production facilities formethionine, resorcinol and other products
・ Lower expenses for the amortization of patent rights associatedwith the acquisition of Sunovion (formerly Sepracor)+350

3. Increased sales volumes and other factors
・ Increase production capacity, launch new products and expand
high value-added product businesses
・ Launch Latuda (lurasidone) and PLED materials

Total

13th Nomura Investment Forum 2010

+730
+1,18010Major Initiatives by Sector
BasicChemicals• PMMA: expand production capacity, increase sales in light-guide panel applications• Alumina: increase sales in the environment & energy and ICT applications(LEDs, Li-ion batteries, glasses for LCDs, photovoltaic cells)• Increase procurement of low-cost feedstocks from overseas and streamline production processes

Petrochemicals &Plastics• Establish worldwide marketing operations, enhance high-performance and high value-added product businesses(e.g. EVA used in photovoltaic cells, high-performance packaging materials, PE/PP and S-SBR for use in automotiveparts, thermoplastic elastomers)• Quickly maximize earnings from Petro RabighFineChemicals• Resorcinol: maximize returns from increased capacity by expanding market share in Asia
• Rubber chemicals: enhance business by launching new materials for automobile tires• Pharmaceutical Chemicals: strengthen the business of pharmaceutical chemicals for drugs addressing unmet
medical needs and off-patent drugs

IT-relatedChemicals• Strengthen polarizing film business by developing low-cost materials and expanding product line for small-sized filmfor smart phones• Expand production capacity for polarizing film
• Establish production capabilities for LCD materials in China (the Huanan region is under consideration)• Expand ArF immersion photoresist and backlight unit businesses

AgriculturalChemicals• Agrochemicals: expand sales by reinforcing our global sales network, enter new businesses such as seed treatment• Pursue synergies in business alliance with Nufarm• Household insecticides and public hygiene products: expand business in downstream and related areas• Feed additives: capacity expansion in Japan and China and sales promotion

Pharmaceuticals• Launch Latuda (lurasidone) in the US, increase its indications, and expand sales outside the US• Increase in-licensing activities to expand our product pipeline• Enhance the profitability of domestic business by increasing patented drug businesses

Others• Complete the development of PLED materials for large-screen televisions and commercialize PLEDs

13th Nomura Investment Forum 201011

Major Investments Made Under Our CorporateBusiness Plan FY 2007-2009 and Current Status

Business Sector

Basic Chemicals

Petrochemicals& Plastics

Major Investments

MMA production capacity expansion(Singapore Phase III expansion)

Already To contributegenerating
to futureearningsearnings✓✓Rabigh Phase I project
Propylene and polypropylene production capacity expansion(metathesis)✓Fine Chemicals

Resorcinol production capacity expansion✓

IT-related
Chemicals

Polarizing film production capacity expansion in Korea andJapan
Color filter production capacity expansion in Korea✓✓✓

ArF photoresist production capacity expansion
Agricultural
Chemicals

Methionine production capacity expansion

Pharmaceuticals Development of Latuda (lurasidone)
OthersDevelopment of PLEDs

13th Nomura Investment Forum 2010✓✓✓12Progress of Major Projects

Improving the Performance of Rabigh Phase I
Equity in Earnings of Affiliates
40 billion yen

Equity in Earnings of Affiliates
11 billion yen

Other Affiliates
Other Affiliates

A substantial improvementin performance is expected

Petro RabighPetroRabigh
FY 2010

FY 2012(Forecast)

Factors Contributing toImproved Performance(Target)Specific Initiatives/Developments

Increased sales volume

Achieve stable full operation

Improved margins

Improved refining margins
Improved market prices for petrochemical products in Asia

13th Nomura Investment Forum 201013Progress of Rabigh Phase II

Joint feasibility study with Saudi Aramco underway
Outline of the study
Plannedfeedstocks
Plannedproducts

13th Nomura Investment Forum 2010

Ethane: 30M standard cubic feet per day
Naphtha: 3M tons per year
Ethylene propylene rubber, thermo plastic olefin,
methyl methacrylate monomer & polymer,
low-density polyethylene, ethylene vinyl acetate,caprolactam,polyols, cumene, phenol,acetone, acrylic acid,superabsorbent polymer and Nylon-614

Maximizing Synergies with Nufarm
Objectives of the Business AllianceFurther strengthen and expand agrochemicals
business through comprehensive alliance in sales,
R&D and other areas.
NufarmSumitomo Chemical(Net Sales: $2.17 bil. AUD）

(Net Sales: $1.4 bil. USD)

OthersOthersFungicides

Herbicides

Insecticides

Products
Complementary
Business
Portfolios
MarketsS.
Asia
AmericaN.
America

Japan

Asia

● Sales:

FY 20122

3

4

Distribution

R&D

Logistics

Sourcing/
Manufacturing

Progress of the Business Alliance
1-1 Distribution of Sumitomo’s products through Nufarm’s sales
channels
Brazil, Indonesia:
France, U.K., Germany:
Central and East Europe,
US, Canada, Mexico,
other markets:Launched in Sept. 2010
Entered into sales agreement, preparing market
launchSales agreement under negotiation

France: Entered into sales agreement, preparing market launch
Vietnam: Began negotiation of sales agreement

2 R&D
Entered into agreement and started specific initiatives for the following items:

EuropeEurope

1

1-2 Distribution of Nufarm’s products through Sumitomo’s sales
channels

OtherN.
AmericaAust.
& NZ

Herbicides

Fungicides

Insecticides

Business Alliance

1. Develop new products using both companies’ formulation technologies
2. Evaluate Sumitomo’s new products and candidate compounds at Nufarm
3. Develop new herbicides effective against weeds resistant to herbicides¥10 to 20 billion increase● Pretax Income: ¥10 billion increase(Increase in sales, reduction in expenses and increase in equity in earnings from Nufarm)

13th Nomura Investment Forum 201015

Launch of Latuda (lurasidone) and Sales Projections
Approval of Latuda
 On October 28, 2010, Latuda wasapproved by the US FDA for thetreatment of adults with schizophrenia
 1st cycle approval without request forAdvisory Committee

Additional indications and expansion ofmarkets
 Bipolar disorder (US): NDA submission in H1 2012, withapproval for the additional indication expected in 2013
 Schizophrenia (Japan & Asia): Clinical testing completed, withdata expected to be available in early 2011
 Schizophrenia (Europe): Currently exploring potential partners

Preparation
for the launch of Latuda
Latuda Sales Projection in the US

 Approx. 300 dedicated medical sales

representatives (MRs) covering 30,000
psychiatrists across the US
 Providing training for Sunovion* MRs
 MRs recruitment scheduled for completionby the end of November 2010
 Enhancing sales force in anticipation of a
Q1 2011 market launch*Sepracor has changed its name to Sunovion as ofOctober 12, 2010

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(Billions of yen)

50FY 2012

FY 2014(Target)(Target)16

Initiatives to Commercialize PLEDs
Polymer Organic Light Emitting
Diode (PLED) Televisions

PLED Lighting Equipment■Prepare for commercial-scale
production of light-emitting materials■Develop materials and devices■Develop core technologies for panel
manufacturing
1122

113
13

104

59687

PLED Display (6.5-inch)
13th Nomura Investment Forum 2010

1. Red
2. Salmon pink
3. Citrus
4. Lettuce green
5. Spring green
6. Spearmint
7. Aquamarine
8. Turquoise blue
9. Cyan
10. Salvia blue
11. Cherry pink
12. Rose red
13. Pearl white

PLED Lighting Equipment
17

Enhancing Financial StrengthEnhancing Financial Strength
Net Assets, Interest-bearing Liabilities & D/E Ratio
Interest-bearing liabilities are expected to decrease after peaking in FY 2010
Net Assets (Left Axis)(Billions of yen)Interest-bearing Liabilities (Left Axis)

D/E Ratio (Right Axis)(Times)1,200

2.4
1,030.5

1,050.0

1,006.0

1,000

719.8
641.0
569.6

1.6

1.4

673.9

578.6

1.2
1.0

470.7
400

2.0

795.4 821.4
775.6

800

600

1,020.0

997.9

1.0

1.2

0.7

0.7

0.6

0.80.6

2000.400.0
FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010(Forecast）

13th Nomura Investment Forum 2010

FY 2011

FY 2012(Target)18

Shareholder Returns

Dividend Policy
We consider shareholder return as one of our priority management issues and have madeit a policy to maintain stable dividend payment, giving due consideration to our businessperformance and a dividend payout ratio for each fiscal period, the level of retained
earnings necessary for future growth, and other relevant factors.
Interim Dividend (left axis)(Yen)

Year-end Dividend (left axis)

Net Income (right axis)(Billions of yen)

16210

141210

12

12

76180

91086891

6461545690(Forecast)

23120

6663

65

150

140(Forecast)

394

59660

3030

1000-30-2-59-4
FY 2004

FY 2005

13th Nomura Investment Forum 2010

FY 2006

FY 2007

FY 2008-60
FY 2009

FY 2010(Forecast)

FY 2011

FY 2012(Target)19

Creative Hybrid Chemistry

13th Nomura Investment Forum 201020

Forward-Looking Statements
Statements made in this material with respect to Sumitomo Chemical’splans, projections, strategies, beliefs, and future performance that are nothistorical facts are forward-looking statements that are based on
information available at the time of the preparation of this material andinclude risks and uncertainties. Factors that could materially affect actual
results of Sumitomo Chemical’s future performance include, but are notlimited to, economic conditions in the areas of Sumitomo Chemical’sbusiness, demand for Sumitomo Chemical’s products in markets,
downward price pressure on Sumitomo Chemical’s products resulting
from intensifying competition, Sumitomo Chemical’s ability to continue toprovide products that are accepted by customers in highly-competitivemarkets, and movements of currency exchange rates.

13th Nomura Investment Forum 201021