Management Policy
Basic Policy
Kuraray Group's management policy was formulated inrecognition of the expanding borderless economy, andstipulates for us to be a visible presence in the world as aunique chemical enterprise. In this way, we have beenworking to maximize enterprise value, and gain the
support of all our stakeholders -- shareholders,
employees, and business partners in regional
communities -- whose expectations to fulfill is at the coreof our efforts.
In this operating environment of dramatic change, wewill continue on a steady growth path while maintaining
our solid financial position. Meanwhile, we have oursights on the future expansion of our operations, which
we will run in a harmonious relation with society.

Medium-Term Strategy
Since embarking on our fourth 5-year management planin April 1996, we have been acting with an eye onswiftly responding to the shifting operating conditions
during this period.
Under our management plan, we placed particularemphasis on four goals: a) boosting the comprehensive
strength of the Kuraray Group; b) creating new
businesses; c) building an effective management system;d) raising a new corporate culture.
During the plan period, we have strengthened andexpanded our core operations through forward-looking
investments. In Japan, we invested in capacity increases
for the thermoplastic elastomers "Septon" and "Hybrar,"
as well as the man-made leather "Clarino," among otherproducts. Overseas, we invested in new production
facilities for Poval (polyvinyl alcohol resin) in Singapore
and for the EVOH resin "Eval" in Belgium, which
operated in line with projections. Also during thereporting period, we resolved on the construction of athermoplastic elastomer plant in the United States, andthus continued to enhance our production and marketing
capacities in preparation for expanding demand in the
21st century. At the same time, we decided to terminate
rayon production, for which an economically viable
future is not in sight.
As before, our management decisions will continue tobe guided by the goal of maximizing the value of theCompany.

Basic Dividend Policy
The Company attaches the highest priority to income
distribution to shareholders. The attainment of thisobjective, however, is predicated on measures to securesteady growth in business performance. As an
appropriate level of income distribution, the Company
envisages a payout ratio of 30% for the time being, and -with ¥8 per ordinary share as the basic dividend -- seeks
to provide further distributions in line with corporate
performance. Earnings designated for internal retention
will be allocated to the expansion of operations as
deemed necessary, including M&A transactions both inJapan and overseas, given expectations of a businessenvironment of increasingly intense competition.

Future Issues
Amid an environment of rapid change, the Group's
sustained growth is predicated on flexibly strengthening
our operating basis in response to such shifts. In line withthis objective, we have been working to extract yet
greater contributions to business performance fromexisting plant and to create a resilient corporate structure,
while ensuring the smooth start-up of the new production
facilities that are currently under construction.
Furthermore, we are in the process of devising the new
medium-term management plan, which will start in thenext fiscal year. This new plan comprises new mediumand long-term management strategies, designed to widenof the scope of our operations as well as reinforce ourbusiness foundation. At the same time, these strategies

will connect to the creation of management systems
attuned to the requirements of the information
technology age and strengthen our corporate governance.
We expect that these measures will benefit our goal of
maximizing the value of the Company.
We believe that contributing to environmental
protection and the advancement of regional communities
represent important management issues. Hence, we areworking to develop and offer products beneficial to theenvironment while reducing the environmental burden by
cutting emissions of relevant substances. In pursuit ofthis goal, we are promoting the thermal recycling ofplastic waste and other substances, while stressing
effective resource allocation and the creation ofrecycling-based manufacturing systems. Having
participated in Responsible Care activities from the very
start, we have acquired ISO 14001 certification -- theinternational standard for environmental management
systems -- for our Kashima Plant, Okayama Plant, andNakajo Plant. Other facilities are scheduled to obtain thecertification during the current term.

Business Performance
Performance Review
The Group's operating environment remained severe as
depressed consumer spending in Japan prevented a fully
fledged economic recovery and crude oil prices
fluctuated at a high level. In this setting, we concentrated
on expanding sales in product areas of particular strength
while enhancing profitability through cost cutting
measures and other improvements.
Despite these efforts, however, the severe operating
conditions that affected our operations connected to a
¥1,827 million drop in net sales, a 1.2% decline from theprevious year, to ¥153,253 million. As a result, operating
income slipped ¥263 million to ¥9,762 million, posting a
2.6% decline. Net income for the reporting period cameto ¥1,833 million, a 72.4% decrease compared with lastyear, reflecting the impact of special provision for
retirement benefits (¥3,750 million) and restructuring
charges (¥3,717 million) recognized during the half-term.
Segment specific performance developed as follows.

1. Segment Performancea. Fibers and Textiles
Net sales in the Fibers and Textiles segment saw a¥3,210 million decline to ¥44,893 million, down 6.7%
from a year ago, with an 18.4% drop of ¥219 million in
operating income to ¥971 million.
(1) Polyester experienced slow demand in Japan, further
aggravated by burgeoning imports, which adversely
affected the market for women's apparel. Although we
worked to boost sales of proprietary products and reduce
cost, both sales and earnings slipped from the previous
year.
(2) Thanks to its alkali resistance, the polyvinyl alcohol
fiber "Kuralon" fared relatively well in its applications

for special alkali resistant fiber reinforcement cement(FRC), battery separators, and rubber reinforcements, but
demand remained stagnant in other industrial materials.
For the new synthetic fiber "Kuralon K-II" we advanced
the development of an extended range of applications
with a view to increasing sales from here on. Sales andnet income in polyvinyl alcohol fibers remained
unchanged from the previous year.
(3) We took steps towards the termination of rayon
production at March-end 2001. While sales declines,
earnings remained unchanged from a year earlier.
b. Chemical Products
Although Chemical Products saw a sales increase of¥1,834 million, or 2.6%, to ¥73,261 million, operating
income posted a 9.6% decline of ¥628 million to ¥5,887
million.
(1) Poval benefited from solid conditions for poval film,
which is used for LCD devices. In addition to lively East
Asian markets, steady performance was supported bydemand for safety glass inter-layers. While sales rose asa result, the adverse impact of peaking crude oil prices
kept net income unchanged from a year earlier.
(2) The EVOH resin "Eval" showed stable performancein Japan, underpinned by applications in food packaging
film and wall paper. The new facility taken onstream in
Belgium in the previous term operated at full capacity,
accompanied by rising sales. Nonetheless, owing to thestrong yen at the time of currency conversion as well as
the rise in crude oil prices, sales and earnings remained
practically unchanged from the previous year.
(3) Methacrylic resins and related products continued tofare well thanks to demand for projection TV screens in
the US. Additionally, progressing user acceptance of
price increases for MMA monomer and resins helped
absorb the higher production costs resulting frompeaking crude oil quotations, with both sales andearnings showing year on year growth as a result.
(4) In isoprene products, thermoplastic elastomers
continued to perform favorably mainly in Europe and theUS, but vitamin products and other fine chemicals

suffered under falling selling prices and contracting
demand, with sales and income declines as a result.
(5) Among other principal products, activated carbon
advanced on the back of growing public works projects,
with additional support from cost cutting measures,
posting higher earnings as a result. Processed plastic
products posted sales and earnings unchanged from theprevious year thanks to newly developed products andapplications.
c. Man-Made Leather, Nonwoven Fabrics, andFastening Materials
Sales of Man-made Leather, Nonwoven Fabrics andFastening Materials declined ¥526 million, or 3.1%, froma year earlier to ¥16,221 million, with operating income
rising ¥191 million, or 16.9%, to ¥1,319 million.
(1) Our man-made leather "Clarino" was affected bylower demand for apparel-related applications in Europe
and by the depreciation of the Euro. Both sales andearnings declined from the previous year.
(2) In nonwoven fabrics operations, expanded sales ofwiping cloth and similar products for wiping lifted sales
and earnings. Fastening materials were supported by thesolid performance of our functional fastener.
Nonetheless, sales and earnings remained unchanged
from a year ago.
d. Diversified Business
NDiversified businesses registered a sales rise of ¥74
million, or 0.4%, to ¥18,878 million, with operating
income of ¥1,500 million unchanged from the previous
year.
(1) In medical products, intensifying competition withdisposable contact lenses connected to a price decline fornon-disposable contact lenses, but inroads made into
overseas dental materials markets developed favorably.
Sales and earnings remained unchanged form a year
earlier as a result.
(2) In other operating areas, engineering revenue andearnings remained flat, while consulting revenue turned
upwards thanks to continued consulting demandrevolving around ISO certifications.

2. Segmentation by Geographical Region1) Japan
The effects of depressed consumer spending and otheradverse factors made for a severe operating environment
in Japan. As a result, net sales came to ¥134,991 million,
with operating income of ¥8,290 million.
2) Other Regions
Aggregate net sales in other regions posted ¥18,262
million, with operating income of ¥1,208 million.

3. Cash Flow
Cash and cash equivalents ("cash" hereinafter) during theperiod under review developed as follows. Cash as of theend of the reporting period came to ¥8,259 million,
reflecting a net cash outflow of ¥5,610 million, based on¥2,929 million cash from operating activities, ¥6,387
million cash used in investing activities, and ¥2,206
million cash used in financing activities.
The principal items contributing to operating, financing,and investing cash flows respectively were as follows.
a) Operating activities
In the term under review, net income in the amount of¥1,833 million and depreciation and amortization of¥7,917 million were partially cancelled out by transfersof gain on sales and appreciation of marketable securitiesof ¥3,104 million to cash flow from investing activities.
As a result, net cash provided by operating activities
amounted to ¥2,929 million.
b) Investing activities
Investments in acquisitions of property, plant andequipment amounting to ¥7,682 million were partly
offset by a ¥2,010 million decrease in marketablesecurities, resulting in cash used in investing activities to¥6,387 million.
c) Financing activities

Repayments of long-term debt and dividend payments
resulted in cash used in financing activities of ¥2,206
million.

4. Interim Dividends
Interim dividends of ¥4.5 per share of common stockincluded an ordinary dividend of ¥4.0 and a ¥0.5 special
dividend.

Full-Term Outlook
Despite the progressing general recovery in economic
activity, the upturn has yet to reach those industrial
sectors that represent the Group's business mainstays.
Overseas, economic expansion will likely continue,
despite decelerating growth in the United States. By thesame token, our growth scenarios for Europe andSoutheast Asia remains largely intact, overriding
concerns about high crude oil prices. Assuming thecontinuation of first-half business conditions during theremaining six months of the term to March 2001, we
expect full-term sales of ¥325 billion, with ordinary
income of ¥25 billion. Net income is estimated to post
¥4.5 billion, which reflects the lump-sum amortization ofpension-related costs -- ¥3,750 million were amortized in
the first half of the term -- as well as losses associatedwith the withdrawal from rayon production effective
March 2001.
Improving the profitability of fiber operations is a
critically important issue. To this end, we will reposition
polyester away from the influence spheres of priceerosion and burgeoning imports, with a shift towards
growth areas in proprietary and functional products.
Additionally, we target further sales increases ofpolyvinyl alcohol fiber through further application
development focusing on its alkali resistance and otherspecial features.
In chemical operations, sales expansion will focus on
operations enjoying prospects of continued demand
growth, such as poval, "Eval," and thermoplastic

elastomers. We also expect to realize sales and income
growth by instituting price increase on these products,
including methacrylic resins, for which the demand-andsupply balance has been shifting in our favor.
Our operating performance estimates for the second halfof the term are based on an expected on a foreignexchange rate of ¥105 to the dollar and Dubai crude oil
at $26 per barrel.
Dividends for the fiscal year are projected at ¥9 per shareof common stock, consisting of an ordinary dividend of¥8 and a special dividend of ¥1.

CONSOLIDATED BALANCE SHEETS(unaudited)

Kuraray Co., Ltd. and Consolidated Subsidiaries

September 30,
2000
ASSETS
Current assets:
Cash and cash equivalents
Marketable securities
Notes and accounts receivable:
Trade
Unconsolidated subsidiaries and affiliates
Other
Loans receivable to unconsolidated subsidiaries and affiliates
Allowance for doubtful accounts

Inventories
Deferred income taxes
Other current assets
Total current assets

Property, plant and equipment:
Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated depreciation

Investments and other assets:
Investment securities
Investments in unconsolidated subsidiaries and affiliates
Loans receivable to:Unconsolidated subsidiaries and affiliates
Other
Deferred income taxes
Cumulative translation adjustments
Other
Allowance for doubtful accounts

Millions of yen
March 31,2000

September 30,
1999

Thousands of
U.S.dollars
September 30,
2000¥8,25913,861¥13,869
26,033¥26,728
21,426$76,472
128,343

91,911
825
2,833
537
(597)
95,50989,102
789
3,634
541
(696)
93,37087,726
862
3,154
404
(701)
91,445851,028
7,639
26,231
4,972(5,527)884,343

75,585
5,135
2,956
201,305

75,1203,761
1,140
213,293

71,651
3,878
1,403
216,531

699,861
47,54627,3701,863,935

24,82485,823353,626
5,270
469,543(343,903)
125,640

25,176
86,213351,695
4,356
467,440(339,097)
128,343

25,36385,599348,1075,107
464,176(331,977)
132,199229,852
794,657
3,274,315
48,796
4,347,620(3,184,286)
1,163,334

103,776
2,685

80,9102,687

68,467
2,671

960,889
24,861

5,167
1,332
3,267
67,109(1,281)
182,055¥509,000

5,345
1,293
7,196
65,988(1,289)162,130¥503,766

5,556
1,319
3,220
5,956
65,016(940)
151,265¥499,995

47,843
12,33330,250

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:
Short-term bank loans
Current portion of long-term debt
Notes and accounts payable:
Trade
Unconsolidated subsidiaries and affiliates
Other
Accrued income taxes
Deferred income taxes
Accrued expenses and otherTotal current liabilities

Long-term liabilities:
Long-term debt
Deferred income taxes
Accrued retirement benefits
Other
Total long-term liabilities

Minority interests

Shareholders' equity:
Common stock with par value of ¥50 ($0.46) per share:
Authorized−700,000,000shares
Issued and outstanding−382,863,603 shares at September 30, 2000
Issued and outstanding−382,863,603 shares at March 31, 2000
Issued and outstanding−369,741,907 shares at September 30, 1999
Additional paid-in capital
Retained earnings
Unrealized gain on securities
Cumulative translation adjustments-

621,379(11,861)
1,685,694$4,712,963

Treasury stock at cost
Total shareholders' equity

Notes : ・ The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.
・ In accordance with the new accounting standard in Japan "Accounting Standard of Financial Instruments",which is effective on and after April 1,2000, marketable securities and investment securities are classified in the three categories, i.e.
held-to-maturity, trading or available-for-sale securities. Trading securities are carried at fair values with unrealized gains or loss to be included in income, and held-to-maturity securities are carried at amortized cost.
Available-for-sale securities are carried at fair value with unrealized gains or losses to be recorded as a component of shareholders' equity, net of applicable taxes. Moreover, available-for-sale securities with maturity of
one year or less and trading securities are classified in current assets, and other securities are classified in Investments and other assets. At beginning of the six months ended September 30, 2000, adoption of the Standard caused
reclassifications of securities between current assets and non-current assets, and net effect of the reclassifications was to increase securities in current assets by ¥368 million ($3,407 thousand), and decrease securities included in
Investments and other assets by the same amount as of April 1,2000. Classification of securities in the balance sheets as of March 31, 2000 and September 30, 1999 were remained unchanged.
・ In accordance with the new accounting standard in Japan "Accounting Standard of Employees' Retirement Benefit", which is effective on and after April 1,2000, a company is required to recognize a pension liability to cover the amountof projected benefit obligation in excess of plan assets at fair value, considering unrecognized items, plus previously recognized unfunded accrued retirement benefit.
The effect of adoption of the Standard was to decrease income before income taxes for the six months ended September 30,2000 by ¥4,052 million ($37,519 thousand).
・ Effective April 1,2000,the Company adopted the amended "Accounting Standards for Foreign currency Transactions, etc". The effect of this adoption is immaterial.
・ Certain reclassifications of previously reported amounts have been made to conform with current classifications.

-1-

September 30,
2000

Millions of yen
March 31,2000

September 30,
1999

Thousands of
U.S.dollars
September 30,
2000¥7,5895,146¥3,805
3,467¥4,43819,608$70,269
47,64849,561
1,232
5,588
4,202
19
15,98389,32051,257
1,149
6,945
4,312
21
16,63687,592

46,250
1,064
9,126
5,042
23
20,634
106,185

458,898
11,40751,741
38,907
176
147,991
827,037

87,2093,305
23,777
15,260129,551

94,225
3,164
22,164
13,494133,047

94,881
2,871
12,714
10,989121,455

807,491
30,602
220,157
141,296
1,199,546

152

372

365

1,408

88,95587,147111,133
6,583(3,839)289,979(2)
289,977¥509,000

88,95587,147111,151(4,496)
282,757(2)
282,755¥503,766

81,82478,180111,991
271,995(5)
271,990¥499,995

823,657-

806,917
1,029,009
60,954(35,546)2,684,991(19)
2,684,972$4,712,963

CONSOLIDATED STATEMENTS OF INCOME(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Millions of yen
Six months ended
September 30, September 30,
2000
1999

Year ended
March 31,
2000

Thousands of
U.S.dollars
Six months ended
September 30,
2000

Net sales¥153,253¥155,081¥316,444$1,419,009

Cost of sales

114,454

114,608

235,603

1,059,759

38,79940,47380,841

359,250

29,03730,44760,520268,861

9,762

10,026

20,321

90,3891,837
100(1,151)(3,717)(3,750)
899

2,017
51
(1,405)
1,086

3,774
83
(2,659)(335)(9,492)
1,685

17,009926(10,657)(34,417)(34,722)8,324(5,782)
3,980

1,749
11,775(6,944)
13,377(53,537)
36,852

4,286(2,133)

5,218
(72)

9,461
(3,560)39,685(19,750)

2,153

5,146

5,901

19,935

6

(0)

(24)

55

¥1,833¥6,629¥7,452$16,972(Gross profit)
Selling, general and administrative expenses(Operating income)
Other income (expenses):
Interest and dividend income
Equity in earnings of affiliates
Interest expenses
Restructuring charges
Special provision for retirement benefits
Other, net(Income before income taxes)
Income taxes:
Current
Deferred

Minority interests in net income of
consolidated subsidiaries
Net income

U.S.dollars

Yen
Net income per share:
Primary
Fully diluted

¥4.79
¥4.73

¥18.09-Notes :・ The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.
・ Certain reclassifications of previously reported amounts have been made to conform with current classifications.

-2-¥20.00¥19.42

$0.04
$0.04

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiariested Subsidiaries
Millions of yen

Balance at March 31, 1999
Net income
Conversion of convertible debentures
Stock issued on exercise of warrants
Cash dividends,¥4.50 per share
Bonuses to directors and statutory auditors
Effect of changes in reporting entity
Balance at September 30, 1999
Net income
Conversion of convertible debentures
Stock issued on exercise of warrants
Cash dividends,¥4.50 per share
Cumulative translation adjustments
Balance at March 31, 2000
Net income
Cash dividends,¥4.50 per share
Bonuses to directors and statutory auditors
Effect of changes in reporting entity
Unrealized gain on securities
Cumulative translation adjustments
Balance at September 30, 2000

Balance at March 31, 2000
Net income
Cash dividends,$0.04 per share
Bonuses to directors and statutory auditors
Effect of changes in reporting entity
Unrealized gain on securities
Cumulative translation adjustments
Balance at September 30, 2000

Commonstock¥78,660

Additional
paid-in
capital¥74,225

100
3,064

100
3,855

81,82478,180

14
7,117

14
8,953

Retainedearnings¥107,029
6,629(1,638)(62)33
111,991
823

Unrealized
gain onsecurities-

Cumulativetranslation
adjustments
-

-

-

-

(4,496)(¥4,496)(1,663)¥88,955¥87,147¥111,151
1,833(1,723)
(60)
(68)

6,583
¥88,955$823,657$823,657¥87,147¥6,583Thousands of U.S.dollars$806,917$1,029,176
16,972(15,954)
(555)
(630)
60,954$806,917

Note : The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.

-3-¥111,133$1,029,009$60,954657(¥3,839)($41,630)

6,084($35,546)

CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)

Kuraray Co., Ltd. and Consolidated Subsidiaries
Millions of yen

Six months ended

Thousands of
U.S.dollars
Six months ended
September 30,
2000

September 30,
2000

September 30,
1999

Year ended
March 31,2000

¥1,833¥6,629¥7,452$16,972

7,917
1,736

7,771
38
(448)
(379)

73,306
16,074(28,741)(26,417)(6,231)(14,917)(2,926)27,120Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash
provided by operating activities Depreciation and amortization
Provision for accrued retirement benefits, net of payment
Gain on sales of investment securities
Gain on sales and appreciation of marketable securities
Exchange loss on loans receivable to subsidiaries(Increase) decrease in notes and accounts receivable
Increase in inventories(Decrease) increase in notes and accounts payable
Other, net
Net cash provided by operating activities--(2,853)(673)(1,611)
(316)
2,929

1,273
(2,148)(2,340)318
10,714

16,7699,488(2,191)(1,192)
2,559(143)(6,203)
2,686(4,159)25,0662,010(7,682)(18,768)
19,793(1,740)(6,387)

3,166(9,899)(7,812)
1,385(5,395)(18,555)(2,498)(19,980)(29,327)
13,474(4,421)(42,752)

18,611(71,130)(173,778)
183,269(16,111)(59,139)52
717(1,252)

(594)
7,028
(20,457)
20,364(3,301)(2,206)

(545)
5,966
(3,814)
6,129(1,638)
(62)
6,036

3,040

481
6,639
(11,593)(15,953)(20,426)

Effect of exchange rate changes on cash & cash equivalents

32

(535)

(553)

296

Effect of changes in reporting entities

22

151

151

204

Net decreace in cash and cash equivalents(5,610)(2,189)(15,048)(51,945)

Cash and cash equivalents, beginning of period

13,86928,91728,917

128,417

Cash and cash equivalents, end of period¥8,259¥26,728¥13,869$76,472(3,104)

Cash flows from investing activities
Decrease (increase) in marketable securities
Acquisitions of property, plant and equipment
Payment for purchases of investment securities
Proceeds from sales of investment securities
Other, net
Net cash used in investing activities
Cash flows from financing activities
Increase (decrease) in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from exercise of warrants
Dividends paid
Other, net
Net cash (used in) provided by financing activities(1,723)-

Notes:・ The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.
・ Certain reclassifications of previously reported amounts have been made to conform with current classifications.

-4--

SEGMENT INFORMATION
Industrial segment information(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Net sales and Operating income

Six months ended September 30,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination
Consolidated total

Net sales tooutside customers¥44,89373,261
16,221
18,878153,253−¥153,253

Millions of yen
Net sales tointersegment
Net sales¥455¥45,348
1,100
74,361
134
7,277
8,966
(8,966)¥ −16,355
26,155
162,219(8,966)¥153,253

Operatingincome
¥971
5,887
1,319
1,500
9,677
85
¥9,762Millions of yen
Six months ended September 30,1999

Net sales to

Net sales tooutside customers

intersegment

Operating
Net sales

incomeFibers and textiles¥48,103¥921¥49,024¥1,190Chemical products

71,427845

72,272

6,515

16,747

178

16,925

1,128

18,804

10,842

29,646

1,501

155,081

12,786

167,867

10,334−¥155,081(12,786)¥ −(12,786)¥155,081(308)¥10,026

Thousands of U.S.dollars
Net sales tointersegment
Net sales$4,213$419,889
10,185688,528

Operatingincome$8,99154,509Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination
Consolidated total

Six months ended September 30,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination
Consolidated total

Net sales tooutside customers$415,676
678,343
150,194
174,796
1,419,009−$1,419,009

1,241
67,38083,019(83,019)$ −Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.

-5-

151,435
242,176
1,502,028(83,019)$1,419,009

12,213
13,88989,602
787$90,389

Industrial segment information(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries
Identifiable assets, Capital expenditures, Depreciation and amortization

Six months ended September 30,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination and Corporate
Consolidated total

Identifiable
assets¥75,546
150,960
37,19058,051
321,747
187,253¥509,000Millions of yen
Capitalexpenditures¥1,461
3,376

Depreciation andamortization¥1,544
4,578

850
706
6,393

1,082
713
7,917

−

−

¥6,393¥7,917

Millions of yen
Six months ended September 30,1999

Identifiable

CapitalDepreciation andassetsexpenditures

amortization

Fibers and textiles¥76,674¥1,443¥1,647

Chemical products

148,793

6,293

4,285

36,590743

1,219

59,212

4,658

620

321,269

13,137

7,771

178,726¥499,995−−¥13,137¥7,771Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination and Corporate
Consolidated total

Six months ended September 30,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination and Corporate
Consolidated total

Thousands of U.S.dollars
Identifiable
CapitalDepreciation andassetsexpenditures
amortization$699,500$13,528$14,296
1,397,778
31,25942,389344,352
537,5092,979,139
1,733,824$4,712,963

7,870
6,537
59,194−$59,194

Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.

-6-

10,0196,602
73,306−$73,306

Geographic Segment Information(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Millions of yen
Six months ended September 30,2000
Domestic (inside Japan)
Outside Japan
Total
Elimination and Corporate
Consolidated total

Net sales tooutside customers¥134,991
18,262
153,253−¥153,253

Net sales tointersegment¥9,862
1,592
11,454(11,454)¥ −Net sales to

Net sales tooutside customers

intersegment

Net sales¥144,853
19,854
164,707(11,454)¥153,253

Operatingincome¥8,290
1,208
9,498
264
¥9,762

Identifiable
assets¥278,357
46,384
324,741
184,259¥509,000

OperatingIdentifiable

incomeassetsMillions of yen
Six months ended September 30,1999
Domestic (inside Japan)

Net sales¥138,695¥10,953¥149,648¥8,439Outside Japan

16,386

1,753

18,1391,433

49,060

Total

155,081

12,706

167,7879,872

325,820−¥155,081(12,706)¥ −(12,706)¥155,081

154¥10,026

174,175¥499,995

Thousands of U.S.dollars
Net sales to
Operatingintersegment
Net sales
income$91,315$1,341,232$76,759
14,741
183,833
11,186
106,056
1,525,065
87,945(106,056)(106,056)
2,444$ −$1,419,009$90,389

Identifiable
assets$2,577,380
429,4813,006,861
1,706,102$4,712,963

Elimination and Corporate
Consolidated total

Six months ended September 30,2000
Domestic (inside Japan)
Outside Japan
Total
Elimination and Corporate
Consolidated total

Net sales tooutside customers$1,249,917
169,092
1,419,009−$1,419,009

Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥108=$1.

-7-¥276,760