Sumitomo Chemical Further Expands LCD Materials Business-Adds Second Production Lines for Polarizing Film in Korea and Taiwan March 1, 2004, Tokyo — Sumitomo Chemical Company, Limited today
announced its decision to construct additional production lines for polarizing film
at its plants in both South Korea and Taiwan. Both lines will be capable of fullyintegrated production, from stretching roll films to assembling the finished product.
Polarizing films, part of the Company’s portfolio of optically functional films, are a
key component of liquid crystal display (LCD) panels.
Sumitomo Chemical has positioned IT-related chemicals as one of its mostimportant core businesses and is aggressively making strategic investments toexpand its operations in this field. In the LCD materials area in particular, theCompany has moved decisively ahead with construction of a color filter plant inSouth Korea, as well as integrated polarizing film plants in both South Korea andTaiwan. The decision announced today is to build phase-II production lines forpolarizing film.
The spreading use of LCD panels in everything from cellular phones totelevisions and computer monitors has sharply increased demand for opticallyfunctional films. As one of the leading manufacturers of these films, Sumitomo
Chemical has committed to increasing its production capacity in order to respondto this strong demand.
The production capacity of the new lines will be 4 million m2/year each. TheCompany expects to complete construction by the end of December 2004. Total
capital investment, which includes the cost of purchasing land and newequipment, is expected to amount to ¥20 billion.
In South Korea, Sumitomo Chemical will be acquiring 150,000 m2 of additional
land adjacent to its Pyongtaek Works, the Company’s production and researchbase in Korea for IT-related chemicals, bringing the total area of the facilities to300,000 m2, including land for the existing plant. Dongwoo Optical Film Co., aKorean joint venture between Sumitomo Chemical and its wholly owned
subsidiary Dongwoo Fine-Chem Co., will begin construction of the new polarizing
film production line in mid-March. The addition of the new line will increase theCompany’s polarizing film capacity in South Korea to 8 million m2/year.
In Taiwan, SC-IK Technology Co., Ltd. a Sumitomo Chemical affiliate, is currently
building its first polarizing film plant, which will be completed in March this year at
Tainan Science Park. The new production line will be installed within the Park,bringing Sumitomo Chemical’s total production capacity of polarizing films in
Taiwan also to 8 million m2/year.

Once these production facilities are completed, Sumitomo Chemical’s production
capacity for polarizing films, including capacity at its plants in Japan, will total 24
million m2/year. This will rank Sumitomo Chemical among the world’s top
producers of polarizing film and further strengthen the Company’s presence inSouth Korea and Taiwan, two of the fastest growing markets for LCD
components and materials. The Company is also considering plans to expand its
production base in China in the near future.
These moves reinforce Sumitomo Chemical’s production capability in two ofAsia’s leading LCD markets and will enable the company to respond more
quickly to customer demand for high-quality products. The new production lines
will also enable the Company to establish a stable supply base and raise its levelof service to customers. Capitalizing on these strengths, the Company will further
promote its solid and strategic alliances with customers to expand its IT-relatedmaterials business.
Overview of Referenced Affiliates
1. Dongwoo Optical Films Co., Ltd.
Established:
October 2002
Main Office:Pyongtaek, South Korea

President:

Chang Mook Choi

Capitalization:

45 billion won (75% held by Sumitomo Chemical;
25% held by Dongwoo Fine-Chem Co., Ltd.)

Staff:

149 (as of December 2003)

Main Lines ofBusiness:

Manufacture and sale of optically functional filmfor LCD panels

2. SC-IK Technology Co., Ltd.
:
April 2001
EstablishedMain Office:TaiwanPresident:

Kazuyoshi Osako

Capitalization:

NT$10 billion (80% held by Sumitomo Chemical;
20% held by Inabata & Co., Ltd.)

Staff:447 (as of December 2003)

Main Lines ofBusiness:

Main Lines of Business: Manufacture and sale of
optically functional film for LCD panels