Sumitomo Chemical to Establish Production Base for IT-relatedMaterials in Wuxi, China.
Tokyo: July 20, 2004 — Sumitomo Chemical Company, Ltd. today announced that itwould establish a new company, Sumika Electronic Materials (Wuxi) Co., Ltd. that will
manufacture IT-related materials in Wuxi, People’s Republic of China.
IT-related materials, particularly materials for liquid crystal displays (LCDs), are a corebusiness for Sumitomo Chemical. With demand for such materials greatly increasing inAsia, the company is moving swiftly to expand and strengthen production bases throughoutthe region. In China, where demand is expected to rapidly increase, the company has been
studying enhancement of local production in terms of location, volume and scope ofproducts to be manufactured. Sumitomo recently decided to build a new plant for ITrelated materials in Wuxi, signing an agreement on July 13, 2004 with the city’s Land
Resource Office to acquire land-use rights to about 407,000 square meters in a high-techindustrial development zone. Wuxi, one of the major cities to experience sustained growthin the Yangtze Delta region, is connected by road and rail to major cities like Shanghai,Suzhou, and Changzhou. The region has attracted many companies in the IT sector, withfurther influx expected. With Sharp Corporation and several other major customers ofSumitomo Chemical establishing operations in the city, the new production base will
enable Sumitomo to provide better support services to its customers as well as a quick
product deliveries, thereby serving as an important base for expanding Sumitomo’s ITrelated business in the Chinese market.
The new company will be incorporated by late July, and plant construction will begin assoon as the government permits are obtained. The initial phase will involve constructionof plants for manufacturing light guide plates for LCDs (capacity 5,000 tons per year) andpolarizing film (10 million sheets per month). These plants are expected to come on stream
in summer 2005.
With the demand for LCD panels increasing rapidly in China, Sumitomo Chemical plans togradually raise production capacity of polarizing films. In addition, it is expected that anew plant will be built in 2–3 years to produce raw roll materials for polarizing films tomeet demand for larger sized LCD panels. With regard to light guide plates, the plant
capacity will be increased in tandem with expected growth in demand, with theconstruction of the second plant slated to begin immediately upon the completion of thefirst plant.
Given the fast-expanding demand in China’s LCD market, the new company will graduallybroaden its product line to offer a wider range of materials for LCD production. Future
activities of the company call for adding manufacture of color filters and, more broadly,
playing a larger role as a center for product development tailored to customer needs as wellas a hub for logistics operation in China. Sumitomo Chemical envisions making the Wuxi
operations into a strategic base for its IT-related materials business in the country.
Sumitomo Chemical already has a polarizing-film plant in Shanghai, operated by its
subsidiary, Sumika Electronic Materials (Shanghai) Co., Ltd. With labor costs rising, staff
recruitment proving difficult, and room for future expansion limited, the company plans togradually transfer production to Wuxi and have the Shanghai operation focus on productdevelopment as well as sample manufacture and small-lot production.
With the establishment of this new base in China, together with existing operations in Japan,
South Korea, and Taiwan, Sumitomo Chemical will be able to respond more flexibly to therapidly expanding demand for LCD-related materials throughout Asia and serve customers
in the region in a timely and efficient manner. The company intends to capitalize on thisnew capability to the fullest extent to expand its core operations in IT-related materials.

The new company in brief
1. Name:Sumika Electronic Materials (Wuxi) Co., Ltd.
2. Establishment:
End of July, 2004 (scheduled)
3. Capital:
US$9 million, initially (approx ¥1 billion)
Capital to increase gradually to US$73 million (¥80 billion) within initial threeyears
4. Production capacity- Phase I (summer 2005):
Light guide plates: 5,0000 tons/year
Polarizing film: 10 million sheets/month- Phase II (after summer 2006):
Light guide plates: 10,0000 tons/year
Polarizing film: 35 million sheets/month
5. Staff:
Approximately 300 (as of summer 2005)
6.President:
Kenichi Miyatake