1

1H of FY2013 (Apr. to Sep.)
Earnings Presentation(Overview)

1Overview of 1H FY2013 Results［Billion ¥, except for reference]

1H
FY2013
Net Sales
Operating Income
Ordinary Income
Net Income

Difference

1H FY2013
Forecast
Announced
Aug. 1, 2013180.9 +18.4 (+10.2%)

205.0

23.9

+0.8 (+3.2%)

26.0

21.9

+3.0 (+13.8%)

25.5

12.7

+3.1 (+23.7%)

16.0

1H
FY2012

199.3
24.7
24.9
15.8

Reference
JPY/USD
JPY/EUR
Domestic naphtha/kl

99130

7999101130¥65,000¥55,000¥65,0002Forecast for FY2013
FY2013
Forecast

FY2012
Actual［Billion ¥]Difference

Net Sales

420.0

369.4

50.6 (13.7%)

Operating Income

55.0

49.2

5.8 (11.8%)

Ordinary Income

53.5

48.64.9 (10.1%)

Net Income

32.0

28.8

3.2 (11.1%)

3

Operating Income Trend
Record-high level earnings［Billion ¥]+¥5.8billion （+11.8%)

60

55.0

54.7

53.1

49.2

5040
30.5

29.3

30

FY

201312FY

201120FYFY

20100920FYFY

2008204

Key Growth Drivers
Gas barrier resin EVALMarket in emerging countries is expanding in addition to developedcountries and also we are developing new applications
Increased production capacity at our North American plant (+12,000 tons)
and further increases in production capacity in progress

Water-soluble PVA film
Individual packaging for detergents is a rapidly growing application, and weare proceeding in global expansion
We are implementing timely production capacity increases

Heat-resistant polyamide resin GENESTAR
Demand is expanding as a material for electronic components and LED components (for backlighting
and general lighting), and as a material for automotive components
We have invested to increase production capacity by 3,000 tons and are moving ahead with plans for aproduction base overseas

5Initiatives for Additional GrowthTechnological innovation
 Fully committed to commercializing VECSTAR for high-speed transmissioncircuits
 New liquid rubber (farnesene): Start sales
 Expand the aqua business through a JV with a local Chinese company
 KURALON: Proceed in development of technology for new production process

Utilization of external resources Dental materials: The integration of the dental materials business with Noritakeis generating results
 Expansion of the lithium-ion battery anode materials business with Kureha Proceed in commercializing ultra-barrier films with strategic investment in U.S.
company Vitriflex, Inc.
 Promotion of M&A
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FY2013 Dividends¥36 per share scheduled（Interim: ¥18, Year-end: ¥18）
Payout ratio
39.4％

Cash dividends per share (Yen)403536362012

2013 （est.）

33

30

27

25
20
16

15
10
5020092010

2011

7

8

1H FY2013 Results(Details)

8

Sales and Operating Income by Segment［Billion ¥]1H FY2013

1H FY2012

Net
Sales

Net
Sales

Operating
IncomeDifference

Operating
IncomeNet
Sales

Operating
IncomeVinyl Acetate

90.1

24.5

75.1

24.4

14.90.1

Isoprene

25.4

2.1

22.4

1.0

3.0

1.0

FunctionalMaterials

23.1

0.5

21.9

0.8

1.3

(0.4)

Fibers & Textiles

21.3

1.3

22.5

1.0(1.2)

0.4

Trading

53.0

1.7

54.2

1.6(1.2)

0.1

Others

30.5

1.4

31.7

2.2

(1.2)

(0.8)

Eliminations &corporate expenses(44.1)(6.9) (46.9)

(7.1)

2.8

0.3

Total

199.3

24.7

23.9

18.4

0.8

180.9

9

1H FY2012 Results (Cash Flow, Etc.)［Billion ¥]1H FY2013

1H FY2012

Difference

Operating CF

23.3

24.8

(1.5)

Investing CF*(25.9)(21.2)(4.7)

Free CF*(2.6)

3.6

(6.3)

M&A-(31.1)

31.1

EPS¥45.04¥36.57¥8.47 (+23%)

Depreciation &Amortization

16.4

13.8

2.6

R&D Expenses

8.4

7.9

0.5

*Cash flows from investment activities and free cash flow exclude net cash used indeposit and short-term investment securities and M&A fees.

10Overview of Main Businesses
PVA resin

Challenging overall, particularly because of intensifying competition in Asia, although sales
expanded in the United States and Europe.

PVA film

Sales volume of optical-use PVA film has grown slightly as demand for LCD TVs
stagnated.
Sales of water-soluble PVA film expanded steadily, backed by active demand.

EVAL

Sales expanded, mainly in the United States and Asia.

Isoprene

While demand for liquid rubber has weakened, demand for fine chemicals and SEPTON
thermoplastic elastomer has rebounded.

GENESTAR

Sales progressed amid favorable demand for LED reflector applications and connector
applications as well as automotive applications.

Methacrylic resin

The performance was affected by weak market conditions and increased costs for raw
materials and fuel.

MedicalSales of dental materials remained stable.

CLARINO

Demand remained sluggish as sales of products created using new processes were not as
brisk as expected.

KURALON

Sales was steady for automotive brake hose applications and use as an asbestos
substitute in fiber reinforced cement (FRC).

11

Summary of Consolidated Assets［Billion ¥］Sep. 30,
2013

Mar. 31,2013

Difference

Current Assets

277.1

257.2

19.9

Fixed Assets

339.9

330.0

9.9

Total Assets

617.0

587.3

29.8

Reference: Term-end exchange rates
Japan

Overseas subsidiaries

Sep. 30, 2013

Mar. 31, 2013

Jun. 30, 2013

Dec. 31, 2012

JPY/USD

98949987

JPY/EUR132

121

129

115
12

Summary of Consolidated Liabilities and Net Assets［Billion ¥］Sep. 30,2013
Current Liabilities

Mar. 31,
Difference
2013

Net Assets

102.0
82.0
184.0
433.0

111.4
74.5
185.9
401.3

(9.4)
7.5
(1.9)
31.7

Total Liabilities andNet Assets

617.0

587.3

29.8

Long-Term Liabilities
Total Liabilities

Reference: Term-end exchange rates
Japan

Overseas subsidiaries

Sep. 30, 2013

Mar. 31, 2013

Jun. 30, 2013

Dec. 31, 2012

JPY/USD

9894

9987

JPY/EUR132

121

129

115

13

Forecast for FY2013
FY2013
Net Sales
Operating Income
Ordinary Income
Net Income
EPS
Dividends per ShareCAPEX (decision basis）
CAPEX （acceptance basis）
Depreciation and Amortization

R&D Expenses

FY2012［Billion ¥］Difference

420.0
55.0
53.5
32.0
¥91.35
¥36

369.4
49.2
48.6
28.8
¥82.62
¥36

50.6
5.8
4.9
3.2
¥8.73
-42.5
60.0
36.5
17.5

61.9
45.5
31.0
16.4

(19.4)
14.5
5.5
1.1
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Factors Affecting the Change in OP Income
1H FY2013¥24.7 billion

Sales volumeUtilization
Selling price, product mix
Raw material and fuel costs
Foreign exchange
Depreciation and amortization
Cost and expense reduction

1.5
1.0
0.0(1.5)
2.5(2.6)(0.1)

1H FY2012
Raw Material and Fuel Costs and‘ Exchange
Foreign¥0.8 billion¥23.9 billion
1H FY2012 (Actual)

1H FY2013 (Actual)

Domestic naphtha／kl¥55,000¥65,000$US （average）

¥79

¥99

Euro （average）

¥101

¥130
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Factors Affecting the Change in OP Income
FY2013¥55.0 billion

Sales volume

4.0
3.0
1.0(2.0)
4.0(5.5)
1.3Utilization
Selling price, product mix
Raw material and fuel costs
Foreign exchange
Depreciation and amortization
Cost and expense reduction

FY2012¥5.8 billion¥49.2 billion

Raw Material and Fuel Costs and‘
ForeignExchange

FY2012 (Actual)

FY2013 (Forecast)

Domestic naphtha／kl¥57,000¥65,000$US （average）

¥83

¥100

Euro （average）

¥107

¥130

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FY2013 Forecast by Segment［Billion yen］

Isoprene

Net Sales
Full Year
1H
2H
90.1
96.9
187.0
25.4
27.6
53.0

Operating Income
Full Year
1H
2H
24.5
25.5
50.0
2.1
3.9
6.0

FunctionalMaterials

23.1

26.9

50.0

0.5

1.5

2.0

Fibers &Textiles

21.3

25.7

47.0

1.3

1.7

3.0

Trading

53.0

57.0

110.0

1.7

1.8

3.5

Others

30.5

36.5

67.0

1.4

1.6

3.0

Eliminations &corporate
expenses(44.1)(49.9)(94.0)

(6.9)

(5.6)

(12.5)

Total

199.3

220.7

420.0

24.7

30.3

55.0

Vinyl Acetate

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(Reference)
Business Expansion of MonoSol, Water-soluble PVA film・Acquired MonoSol, LLC, a U.S.-based poval film manufacturer, in June 2012.
・The company specializes in water-soluble film, with applications including
individual packaging for detergents, agrochemicals and dyes as well as laundrybags and mold-release films for synthetic marble.

We decided to expand production facilities in June
2013, and plan to begin operation in July 2014.
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(Reference)
Development of GENESTAR for Automobile Parts
・ Development for automobile parts using the characteristics of heat resistance, low water
absorbency, chemical resistance, gas barrier function, high abrasion resistance, etc.
→ Contribute to lighter vehicles as a replacement for metal parts
・ Current expansion centered on fuel-, cooling- and abrasion-related parts

Wiper motor gear
Fuel line

Intercooler tank

Thermostat
Wire harness
protective tube

We increased production capacity in August 2013 (Kashima Plant).

Roller for
sliding door
19

(Reference)
New Grades of GENESTAR for LEDs
 Changed resin composition to improve light resistance Converted some existing equipment and started production (first half of FY2012)

Brightness×Durability Launch products in succession during FY2013

2000

New grade
Improvement ofexisting grade

Existing gradeLightings

Notebook
computers

LCD TVs

Mobile phones,
Game machines,
Interior lights ofautomobiles

Transition to LED

201520(Reference)
LCP Film VECSTAR for High-Speed Transmission Circuits
 Suited for both high transmission speeds and thinner products
 Expected applications in high-performance notebook PCs, tablet PCs andsmartphones
 Large users are now evaluating circuit performance Now expanding supply chain, which centers on manufacturers of copper laminatesand flexible circuit boards
Decision to increase production capacity:
Location: Saijo Plant
Current production capacity: 400,000m2/year
After capacity increase: 1,000,000m2/year
Facility investment: Approximately ¥500 million
Start of operation: Planned for April 201421

(Reference)
New Biomaterial (Farnesene) for Liquid Rubber (LFR)
 Expand liquid rubber business centered on tire applications
 Focus on biomaterials for a liquid rubber product lineup that uses
new monomers to succeed isoprene (LIR) and butadiene (LBR)
 Begin development in the alliance with U.S. biomaterial venture
Amyris, Inc.
 The main target is fuel-efficient tires.
 Adding LFR minimizes heat loss from friction between fillers, whichraises fuel efficiency.
 Ten major tire manufacturers in Japan and overseas are now
evaluating samples.
 Actual running test for automobiles which will be launched in 2015
and 2016 is in progress.
 Sales are expected to begin in the second half of FY2013.
22

(Reference)
Strategic Investment in a Start-Up Developing Ultra-barrier Films
・Kuraray has developed applications for barrier materials such as EVAL andKURARISTER in a wide range of areas such as food packaging and automobile fueltanks.
・Currently, glass is used as a steam and oxygen barrier material in OLEDs and thinfilm photovoltaic cells, but we expect need for replacement barrier materials will
increase in the future.
・Vitriflex has developed ultra-barrier films that have the world's highest level ofbarrier performance. We expect strong synergy with our barrier materials,technology and expertise.
・We completed strategic investment in Vitriflex in August 2013, and took a seat on
Vitriflex’s board of directors.

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This presentation contains various forward-looking statements that are based on the current expectations andassumptions of future events. All figures and statements with respect to the future performance, projections, andbusiness plans of Kuraray and its Group companies constitute forward-looking statements. Although Kuraraybelieves that its expectations and assumptions are reasonable, actual results and trends of Kuraray’s performance
could differ materially from those expressed or implied by such figures or statements due to risks and uncertainties
in future business circumstances. The factors that may cause such difference include, without limitation: (1) generalmarket and economic conditions in Asia including Japan, the U.S., Europe and other regions; (2) fluctuations ofcurrency exchange rates, especially between the Japanese yen and the U.S. dollar and other foreign currencies; (3)changes in raw material and fuel costs; (4) industrial competition and price fluctuations in Japan and international
markets; (5) advance or delay in the construction of new plants and production lines; (6) successful development of
new products and technologies; and (7) changes in laws and regulations (including tax and environmental) and legal
proceedings.
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