FOR IMMEDIATE RELEASE

Kurita Water Announces Earnings for the Six-Month Period to September 30, 2002
Consolidated orders fell 16 percent to 68.0 billion yen

Operating income fell 28 percent to 4.3 billion yen

Net income fell 23 percent to 2.2 billion yen

Within the Water Treatment Chemicals Division the Group was able to expand long term contract orders tomaintain order volume despite the depressed Japanese economy.

Within the Water Treatment Facilities Division the overseas market overtook the domestic market in terms ofsales of hardware (excluding maintenance operations) as a result of movement of electronics makers toAsia



Domestic maintenance services were depressed due to low order volume at electronics plants

Tokyo, October 31, 2002 -- Kurita Water Industries Ltd., a global leader in the water treatment business,announced results for the six months ended Sept. 30, 2002.

Water Treatment Chemicals Division
Orders for Water Treatment chemicals fell 4 percent to 23.8 billion yen over the period under review. Operating
income in this division fell 2 percent to 3.6 billion yen. Sales fell 0.5 billion yen to 23.2 billion yen. The main reason
for the decline in orders was the weak Japanese economy, which led to a reduction in orders from customers inheavy industries such as the steel and paper-pulp industries.

This decline was partly offset by an increase in orders due to expansion of orders for water management on along term contract basis, such as steam, and deoxidized water contracts. Kurita was successful in both of theseareas because of presenting cost-saving solutions to maintain plant efficiency over the long term. Other areasthat expanded orders well were chemical injection and dosing systems and chemicals for the oil refinement
process.

Water Treatment Facilities Division
Orders for Water Treatment Facilities fell 22 percent to 44.2 billion yen. Operating income in the division fell 68
percent to 0.7 billion yen. Sales in the division fell 7.3 billion yen to 38.5 billion yen,

The decline in orders was led by a decline of 6.5 billion yen in orders for ultra pure water systems and otherfacilities used in the production of semiconductors, and other electronics components to 15.2 billion yen. Orders
fell as electronics makers slashed capital investment to reduce capacity in the wake of falls in demand for theirproducts. The Company continued to face a difficult operating environment as a result of the continued low
facilities spending, but put more effort into its main target businesses, seeing favorable growth in investment infacilities in Taiwan, Korea and China manufacturing.

Particularly Kurita showed its competitive advantage in providing ultra pure water for cleansing screens for Liquid
Crystal Display (LCD) makers. The Company garnered more contracts as manufacturers upgraded existing
facilities in response to demand for 1,100 to 1,250 millimeter LCDs for use in large flat-panel display screens.

Overseas sales (excluding maintenance operations) surpassed domestic sales in the Water Treatment Facilities
Business for the first time.

Orders from the electronics industry in Japan fell due to continued consolidation of the Japanese semiconductor
market. Japanese electronics makers are cutting capacity and even pulling out of some types of semiconductor
markets in response to increased competition from overseas makers. Domestically, the Electronics market saw
an increase in the ratio of small, rather than medium size and large fabs, with the ratio of small size investments
growing.

In response, Kurita pushed ahead with its plan to increase sales of ready-made rather thancustom-made products. These products deliver the benefits of decreased order to delivery time, stable qualityand decreased space requirements.

Kurita continued its expansion overseas, in Asia, with the establishment of Kuritec Singapore Pte. Ltd. andKuritec (Shanghai) Co., Ltd., which are both presently non-consolidated subsidiaries. Capital investment within
the area encompassing Taiwan, Korea, and China, reached a peak during the period, with many new plants
coming on line. Kuritec Singapore provides ultra-pure water for LCD makers, while Kuritec Shanghai works on amaintenance service business. Kuritec Singapore is expected to rack up impressive orders which could affectconsolidated sales as early as the second half of this fiscal year.

Orders for water treatment facilities for general industries such as electric power, food, pharmaceuticals, fell 2.3
billion yen to 14.7 billion yen, while sales fell 1.2 billion yen to 14.3 billion yen.

Environmental Control Facilities
Orders for public works in Japan for environmental facilities fell 3.5 billion yen to 14.3 billion yen and sales fell 2.8
billion yen to 7.7 billion yen. Kurita continued to offer innovative solutions, including energy saving solutions tocustomers in the public sector. Budgets for local entities for sewage treatment facilities and sludge recycling
facilities were slashed. Within maintenance services for the division, orders were up as a result of solutions–ledsales, despite severe cost cutting pressure by local governments.

Kurita provides facilities for sewage systems and human waste management systems to local governments inJapan, many of whom are faced with severe financial difficulties and are not in a position to increase theinvestments in local services.

Maintenance Business / Contract Business Increasing for Steady Profitability
Kurita pushed ahead with its strategy of signing maintenance contracts in Water Treatment Chemicals and ineach of the three market segments that make up the Water Treatment Facilities Division: Electronics Industry,General Industry, and Environmental Control Facilities.

During the period orders and sales were lower than expected for maintenance service in the electronics industry
as a result of high order volumes at the nation’s electronic manufacturers despite being in line with expectations
across the board. In Japan, maintenance periods tend to be centered around the three holiday periods of May(Golden Week), August (Obon), and December (the New Year’s Holiday). The May season proved to be
especially weak as plants remained open to keep up with high demand through the season. During the Augustseason, orders rebounded to a normal level, but did not reach above, as could have been expected to make up
for the missed May period.

While some saw this as a possible sign that electronics makers are trying to decrease maintenance as a cost
cutting measure. Kurita expressed confidence that the business would continue strongly because maintenanceincreases efficiency and therefore is itself a cost cutting measure.

The maintenance business, is a pure water solution for maintaining efficiency in almost all types of plants. It isalso beneficial to the company’s cash-on-hand position, as it is the product with the shortest order to sales timelag, usually with the time period being less than a month.

Kurita was successful in switching over to long-term contracts for many of its larger customers, in some cases
completely taking over the operations, another measure to boost long-term steady returns.

Soil and Groundwater Remediation Subsidiary Beats Growth Expectations
Kurita also took further steps to move into new markets by taking advantage of its experience in environmental
technology and soil contamination removal. Sales at Land Solution Inc., a non-consolidated subsidiary which wasestablished during the previous fiscal year, continued to show unexpectedly strong growth due to expansion ofsoil and groundwater remediation business market. This new business is expected to contribute to the businessin the future.

The business works on the increasingly prevalent practice of including contamination in the value of land and thecompany offers services which decrease contamination risk. The company has been successful in the pursuit of
its niche strategy in targeting real estate transaction market with realtors, banks, and trust banks.

Accounting Notes:
Kurita changed management pay scales from a monthly to a yearly pay basis. As a result of the change inpractice accrued bonuses decreased and operating income of the first half of this fiscal year increased 0.3 billion
compared to the situation had the normal monthly pay basis scale had been adopted.

Financials
A summary of relevant financials follows.

Consolidated Interim Balance Sheets(Units: Millions of yen)
Increase
As of

As of

As of

Sept. 30, 2002

Sept. 30, 2001

March 31, 2002

(decrease)
From

From

Sept. 30, 2001

March 31, 2002

AssetsCurrent assets:Cash and deposits

35,44830,92933,4084,519

2,040

Notes receivable-trade

10,75013,55910,534(2,809)216

Accounts receivable-trade39,28739,36944,939(82)(5,652)Marketable securities

4,946

8,637

4,640

(3,691)306

Inventories

10,88912,2097,702(1,320)3,187

Deferred income taxes

1,505

1,724

1,503

(219)

2

Other

784

915

945

(131)

(161)

Allowance for doubtful accounts

(160)

(194)

(185)

34

25

103,452

107,151

103,490(3,699)(38)

Buildings and structures

13,921

14,32814,419

(407)

(498)

Machinery and equipment

3,580

4,117

3,874(537)

(294)

Land

15,03815,002

15,044

36

(6)

306

715

198

(409)

108

Total current assets

Construction in progress
Other
Tangible fixed assets:

2,629

2,753

2,816

(124)

(187)

35,47636,91836,353(1,442)

(877)

2,000

1,268

1,812

732

188

Intangible fixed assets:
Software

524

558

542

(34)

(18)

2,525

1,827

2,354

698

171

18,76618,755

18,31911447

subsidiaries and affiliates

2,450

3,835

2,547

(1,385)(97)

Long-term loans

2,639

143

2,585

2,496

54

Deferred income taxes

3,7442,452

3,857

1,292

(113)

Other

2,696

2,851

2,717

(155)

(21)

Other
Total intangible fixed assets
Investments and other assets:Investment in securities
Investment in non-consolidated

Allowance for doubtful accounts
Total investments and other assets

(102)

(35)

( 80)

(67)

( 22)

30,19528,001

29,9472,194

248

Fixed assets

68,197

66,746

68,655

1,451

(458)

Total Assets

171,649

173,898

172,145(2,249)(496)

(Units: Millions of yen)
Increase
As of Sept.

As of Sept.

As of30, 2002

30, 2001

March 31, 2002

(decrease)
From Sept.

From March

30, 2001

31, 2002

Liabilities
Current liabilities:
Notes payable-trade

1,641

2,481

1,912

(840)

(271)

Account payable-trade17,277

20,52620,999(3,249)(3,722)

Short-term borrowings

27

130

139

(103)

(112)

Outstanding payments/expenses

5,242

5,854

6,835

(612)

(1,593)

Income taxes payable

2,331

2,185

442

146

1,889

Advances received

4,160

4,982

1,621

(822)

2,539

Accrued employees’ bonuses

2,932

3,542

2,927

(610)

5

Allowance for product warranty

883

934

923

(51)

(40)

Other593

850

782

(257)

(189)

35,08841,48836,585(6,400)(1,497)

48

83

78

(35)

(30)

11,053

9,946

10,873

1,107

180

722

567

667

155

55

756

782

792

(26)

(36)

Total fixed liabilities

12,58011,38012,411

1,200

169

Total liabilities

47,66952,86948,997(5,200)(1,328)

Minority Interests

548

523

558

25(10)

Total current liabilities
Fixed liabilities:
Long-term debt
Accrued employees' retirement
benefits
Retirement benefits for directors andcorporate auditors
Other

Shareholders’ Equity:
Common stock13,450

13,45013,450－－Capital surplus

11,398

11,398

11,398－－Retained earnings

99,71897,02598,804

2,693

914

19－

19

19

－

securities

298

92

162

206

136

Foreign currency translation

(584)

(663)

(418)

79

(166)

(870)

(799)

(827)

(71)

(43)

123,431

120,504

122,590

2,927

841

171,649

173,898

172,145(2,249)(496)

Revaluation difference on land
Revaluation surplus of otheradjustment
Treasury stock

Total shareholders' equity
Total Liabilities, Minority Interests andShareholders' Equity

Consolidated Interim Statements of Income(Units: Millions of yen)Interim period

Interim period

Fiscal year

Increase

Apr. 1, 2002 –Apr. 1, 2001 –Apr 1, 2001 –Previous

March 31, 2002

interim period(decrease)

Net sales

Sept. 30, 2002

Sept. 30, 2001

61,73469,517100.0%

100.0%

142,678

100.0(7,783)

Cost of sales

42,00468.0

47,333

68.1

99,03969.4(5,329)

Gross profit

19,73032.0

22,18431.9

43,63930.6(2,454)administrative expenses

15,39025.0

16,19423.3

32,84823.0( 804)

Operating income

4,339

7.0

5,989

8.6

10,7907.6(1,650)

Selling, general andNon-operating income

561

0.9

681

1.0

1,104

0.7(120)

Non-operating expense

340

0.5

125

0.2

279

0.2

215

4,560

7.4

6,545

9.4

11,615

8.1( 1,985)

Ordinary income
Special gains:
Gain on sales of stock ofaffiliated companies

( －)

( －)

－

932
932

0.7

Special losses:
Loss on sales of investment
securities

92

1,063

1,986(971)

579

581

1,162( 2)Amortization of unrecognized effectof change in accounting for
employees’ retirement benefits
Other－－－

278

671

1.1

1,644

2.4

3,427

2.4( 973)

Income before income taxes

3,888

6.3

4,900

7.0

9,121

6.4(1,012)

Income taxes

1,668

2.7

2,044

2.9

3,401

2.4(376)

46

0.1

24

0.0

49

0.0

2,173

3.5

2,832

4.1

5,670

4.0

Minority interests in earningsof consolidated subsidiaries
Net income22( 659)

Consolidated Interim Statements of Retained Earnings(Units: Millions of yen)Interim period

Interim period

Fiscal year

Increase (decrease)

Apr. 1, 2002 –Apr. 1, 2001 –Apr 1, 2001 –Previous interim

Sept. 30, 2002

Sept. 30, 2001

March 31, 2002

periodCapital surplus:
Capital surplus at beginning of period

11,398

11,398

11,398－

Capital surplus at end of period

11,398

11,398

11,398－

period98,804

95,444

95,444

3,360

Increase in retained earnings

2,173

2,832

5,670

(659)

Net income

2,173

2,832

5,670

659

1,058

1,058

2,117

0120

164

164

( 44)

66

－－66

Retained earnings:
Retained earnings at beginning of

Decrease in retained earnings:
Dividends paid
Bonus for directors and corporate
auditors
Decrease in retained earnings due tochange in scope of consolidation

1427

27(13)

Total decrease in retained earnings

1,259

1,250

2,309

9

Retained earnings at end of period

99,71897,02598,804

2,693

OtherConsolidated Interim Statements of Cash Flows(Units: Millions of yen)Interim period

I.

Interim period

Fiscal year

Apr. 1, 2002 –Apr. 1, 2001 –Apr 1, 2001 –Sept. 30, 2002

Sept. 30, 2001

March 31, 2002

Cash flows from operating activities:
Income before income taxes

3,888

4,900

9,121

Depreciation and amortization

1,559

1,583

3,409

Amortization of consolidation goodwill
Equity in earnings of unconsolidated subsidiaries and048

78(72)

(228)

(198)

180(97)

828

(78)

(60)

(25)

affiliates
Increase (decrease) in accrued employees' retirement
benefits
Decrease in allowance for doubtful accounts
Increase (decrease) in other allowances

21

188

(340)

Interest and dividend income

(251)

(259)

(454)

Other non-operating income

(195)

(193)

(326)

Interest expense

11

1535

Other non-operating expenses and special losses

203(19)242

Loss on sales and revaluation of investment in securities

58

1,063

1,053

Loss on sales and disposal of tangible fixed assets

2719119

Increase in trade notes and accounts receivable

5,259

14,63912,200Decrease (increase) in inventories(3,221)(2,007)

2,537

Decrease (increase) in other current assets

174

(13)

(50)

Decrease in trade notes and accounts payable(3,547)(9,102)(8,854)

Increase (decrease) in advances received

2,539

2,040

(1,320)Decrease in other current liabilities(1,344)(1,008)

(226)

(67)

(79)

(165)

Bonuses paid to directors and corporate auditors
Other(51)35

6Sub-total

5,09411,464

17,669Interest and dividends received

383

267

506

Other non-operating income received

195

173

280

Interest paid

(11)

(14)

(35)

Other non-operating expenses paid

(120)

(77)

(216)

Income taxes paid

232

(5,624)(9,490)

5,772

6,188

8,713

(141)

(578)

(605)

Proceeds from refund of time deposits

272

169

98

Payments for purchases of marketable securities(100)－(801)Net cash provided by operating activities
II.

Cash flows from investing activities:
Payment for time deposits

Proceeds from sales of marketable securities

2,431

1,377

3,250

Payments for purchases of tangible fixed assets(1,742)(1,461)(2,747)

Proceeds from sales of tangible fixed assets

86

41

93

(3,808)(2,828)(5,417)

Proceeds from sales of investment securities

855

2,103

4,398

Cash disbursement on long-term loans

(66)

(9)

(2,461)Other payments(554)(1,041)(1,826)

Other proceeds

346

451

684

(2,420)(1,775)(5,334)

Payments for purchases of investment securities

Net cash used in investing activities

Consolidated Interim Statements of Cash Flows -- continued(Units: Millions of yen)Interim period

Interim period

Fiscal year

Apr. 1, 2002 –Apr. 1, 2001 –Apr 1, 2001 –Sept. 30, 2002

Sept. 30, 2001

March 31, 2002

Proceeds from short-term debt

150

137

154

Repayment of short-term debt

(187)

(88)

(96)

Proceeds from long-term debt

1

1

1

Repayment of long-term debt

(4)

(30)

(45)

Proceeds from sales (payments for purchase) of treasury

(26)

2

(25)

(1,059)(1,058)(2,158)(1,125)(1,035)(2,169)

(39)

48

145

V. Net increase in cash and cash equivalents

2,186

3,426

1,354

VI. Cash and cash equivalents at beginning of period

32,98031,56931,569III. Cash flows from financing activities

stockCash dividends paid
Net cash used in financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents

VII. Cash and cash equivalents due to increase of consolidated
subsidiaries
VIII. Cash and cash equivalents at end of period

－56

56

35,16735,052

32,980