Summary of the Q&A Session at the Financial Results Conference Callfor the First Nine Months of the Year Ending March 31, 2017

Date and Time: February 1, 2017 (Wed.) 11:00 - 11:40
Notice: This summary is a reference designed for the convenience of those who could notattend the financial results conference call stated above. Please note that this is not aword-for-word transcript of all remarks made at that session, but is a summary prepared by
Kurita Water Industries Ltd.
Q. There has been an increase in orders for soil remediation and thermal power generation
facilities included in Water Treatment Facilities for general industries. What is your viewof trends going forward?
A. We believe that the current pace of soil remediation orders is likely to be maintained but,FY2016 is likely to be the peak for orders of electric power generation-use facilities.
That said, given the typically long lead times associated with electric power generation
facilities, revenues should continue to grow.
Q. Did Kurita Water Supply Service (KWSS) successfully win orders in Q3? Are you seeinga shift away from outright sales of hardware to KWSS's service model?
A. KWSS has won 14 contracts in FY2016. We are not seeing an acceleration in the shift
toward services. However, by nature, such contracts require a thorough assessment ofexpected investment returns. Given this, we feel the progress has not been particularly
bad.
Q. Your operating profit margin has been declining. Should we expect the outlook for theelectronics industry within the Water Treatment Facilities business to remainchallenging?
A. The electronics industry margin is lower this fiscal year because of revisions made tocontracts with an Ultrapure Water Supply (UPWS) customer. Until the depreciation
associated with these contracts rolls off, lower revenues will have a direct impact onprofits. As the contract revision happened partway through the current fiscal year,
profitability on these contracts for the next fiscal year will also be impacted. However,profitability for industries other than electronics has been improving. We believe that
this will allow us to offset the negative impact from the electronics industry in the next
fiscal year as well.
Q. The profitability of general industries Water Treatment Facilities does not appear to beimproving. Is there a possibility that overall profits could fall again next fiscal year, if
current circumstances do not change?
A. We are making progress in improving profitability for the Water Treatment Facilities forgeneral industries. We are currently formulating our forecasts for next fiscal year, andwould like to guide for YoY increases in profits.

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Q. Can you comment on the profitability of the recently acquired Fremont Industries (US)?
A. This company was privately held prior to acquisition. As such, we are confident that therewill be room to improve margins.
Q. Given goodwill amortization, should we expect that Fremont Industries will be a drag on
consolidated operating profits in the next fiscal year?
A. We are currently in the process of reviewing the goodwill, so at this stage, we cannot
comment on what profits might look like after goodwill amortization.
Q. How would you assess the progress you have made up to the end of Q3 on achieving
your profit targets for the Water Treatment Facilities segment, for both the electronics
industry and general industries?
A. Both have made good progress versus our full-year forecasts. We see no issues inachieving our full-year guidance.
Q. Am I correct in assuming that overseas water treatment chemicals sales for Q3 on athree-month basis were slightly lower YoY on a local currency basis? Can you also talkabout the conditions in the various geographies?
A. It is true that revenues were slightly down. By subsidiary, Singapore, Thailand andEurope reported lower revenues.
Q. You have not changed your plan for overseas water treatment chemicals sales. Is thedownturn in Q3 a temporary phenomenon?
A. The fiscal year-end for our overseas subsidiaries is December. All of our water treatment
chemicals subsidiaries reported YoY increases in sales on a local currency basis.
Q. Domestic water treatment chemicals sales appear to be quite solid. Can you talk about
why? Also, do you think you can maintain revenue growth of 2-3% YoY in FY2017?
A. Our impression is that the domestic water treatment chemicals business has been
improving since October of last year. Our customers' production levels appear to be
recovering on the back of the completion of inventory adjustments. In addition, webelieve that the appeal of the Dreem Polymer product has played a significant role inwinning new customers. It is too early to comment on next fiscal year but we would
hope to be able to guide for topline growth of more than 2% YoY.
Q. In Q3 you won a large-scale domestic order in electronics for the Water Treatment
Facilities business. Can you talk about expected profitability?
A. It should be relatively good.
Q. How do you view the opportunities related to proposed large-scale investments in China
and the US by your main customers?
A. We would certainly seriously consider any inquiry that came in, but so far, there havebeen no such inquiries.

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Q. Can you talk about earnings at Kurita Europe GmbH (KEG)?
A. We missed large-scale orders in both paper processing chemicals and alumina
compounds. As a result, we have fallen behind our initial plan. Given the amortization of
goodwill and technology-related assets, KEG finished its fiscal year slightly in the red.
We continue to see steady growth in sales of water treatment chemicals and fromcross-selling synergies.
Q. There is talk of capex from your UPWS customers. Can you give us a sense for yourexpected capex spend in FY2017 for this business?
A. We hope that capex will increase versus this fiscal year but we do not expect the scale ofincreases will be as large as last fiscal year.
Q. You sold investment securities in the December quarter. Did you accelerate sales in order
to secure funding for investments?
A. The divestment of securities this time was a part of a regularly scheduled review ofstrategic equity holdings. We sold holdings in three companies because they did notachieve expected returns. We did not accelerate sales of equities to cover fundingneeds.

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 andother forward-looking statements to differ materially from the forecasts.

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