FOR IMMEDIATE RELEASE

Kurita Water Industries Reports Earnings for the First Six Months Ended
September 2007
Tokyo, Japan, October 31, 2007—Kurita Water Industries Ltd. (TSE Security Code 6370) announced net
sales of 94,112 million yen for the first six months (April 1 – September 30, 2007) of the fiscal year
ending March 31, 2008 and net income of 7,522 million yen, or 58.46 yen per share.

Results of Operations
Total consolidated orders for the Kurita Group increased 7.1% from a year earlier to 108,795 million yen,while net sales grew 8.9% to 94,112 million yen. Operating income was up 27.2% to 13,496 million yen,and ordinary income rose 28.8% to 14,063 million yen. This resulted in net income of 7,522 million yen,
an increase of 22.4% over the previous interim result. In a breakdown by segment, sales in water
treatment chemicals grew 4.3% year on year to 28,875 million yen while sales in water treatment
facilities rose 11.2% to 65,236 million yen.
Capital expenditure levels were strong in Japan, Taiwan, and South Korea throughout the period against abackground of buoyant demand in the electronics industry for semiconductor and LCD products. In
general industries, both factory operating rates and capital expenditures remained robust, mainly in basic
materials sectors such as steel, oil refining, and petrochemicals.
The Company has decided on an interim dividend of 15 yen per share. Taking into account the Group'sbusiness performance, and to reward shareholders for their support, the Company intends to raise theyear-end dividend by 2 yen to 17 yen per share. This results in a projected annual dividend of 32 yen per
share.

Segment Information
Water Treatment Chemicals
Total Group orders for the segment increased 4.8% from a year earlier to 29,725 million yen, while sales
grew 4.3% to 28,875 million yen and operating income rose 7.4% to 4,998 million yen.
During the period, the Group concentrated its efforts on securing stable order flows by rapidly delivering
water treatment technologies and services that meet customer requirements, while further strengthening
efforts to expand sales of mainstay products, such as boiler water treatment chemicals and cooling water
treatment chemicals. The Group also worked to expand sales of high-value-added products, respond andadapt to rising costs of raw materials, and reduce manufacturing and logistics costs.
Results for the Japanese market were as follows. Of the Group's mainstay products, orders for boiler
water treatment chemicals were flat, orders for wastewater treatment chemicals rose slightly, and orders
for cooling water treatment chemicals increased, buoyed by the effects of extremely hot weather. With
regard to other products, orders for packaged water treatment management contracts declined due toincreased cost-cutting efforts and more intense competition at client companies, while orders for process
treatment chemicals used in the oil refining and petrochemical industry were largely flat. Orders forprocess treatment chemicals used in the paper and pulp industry increased, reflecting the ongoing successof efforts to expand sales of competitive products. Overseas, orders for the Group's products increased on
the back of vigorously expanding sales to China and Southeast Asian countries, which are currently
enjoying rapid economic growth.
Water Treatment Facilities
Total Group orders for the segment increased 8.0% from a year earlier to 79,070 million yen, while sales
grew 11.2% to 65,236 million yen and operating income rose 42.7% to 8,495 million yen.
During the period, the Group focused its energy on expanding service businesses, such as the ultrapure
water supply business and tool cleaning services, while also strengthening sales to clients insemiconductor industries. Overseas, the Group worked to secure orders through concentrated sales efforts

1aimed at strategic clients in China, Taiwan, and South Korea. To secure revenues and earnings, the Group
continued its efforts to improve design and installation productivity, reduce costs, and improve quality.
Orders for the Group's mainline ultrapure water production systems for the electronics industry increasedslightly in Japan but declined in overseas markets. Orders for water treatment facilities used by the basic
materials industry grew significantly, reflecting large orders from the steel industry. In service businesses,
orders for the ultrapure water supply business rose significantly on the back of new contracts, orders fortool cleaning services for semiconductor and LCD production equipment increased, and those for related
maintenance services were up slightly. Orders for soil remediation services declined substantially due toincreasingly intense competition.

Net Sales, Order Intake, Order Backlog
Net Sales

Business segment
Water treatment chemicals
Water treatment facilities
Total

Six months ended
September 30, 2007

Six months ended
September 30, 2006

Amount
28,87565,236
94,112

Amount27,69458,68686,381

%
30.7
69.3
100.0

%
32.1
67.9
100.0

(In million yen)
Year ended
March 31, 2007
Amount56,667140,479
197,146

%
28.7
71.3
100.0

Order Intake

Business segment
Water treatment chemicals
Water treatment facilities
Total

Six months ended
September 30, 2007

Six months ended
September 30, 2006

Amount29,72579,070108,795

Amount28,35973,196
101,555

%
27.3
72.7
100.0

%
27.9
72.1
100.0

(In million yen)
Year ended
March 31, 2007
Amount56,560135,969
192,529

%
29.4
70.6
100.0

Order Backlog

Business segment
Water treatment chemicals
Water treatment facilities
Total

Six months ended
September 30, 2007

Six months ended
September 30, 2006

Amount4,349
65,66570,014

Amount4,272
70,85075,122

%
6.2
93.8
100.0

%
5.7
94.3
100.0

(In million yen)
Year ended
March 31, 2007
Amount3,499
51,83055,330

%
6.3
93.7
100.0

Outlook for the Fiscal Year Ending March 31, 2008
The Group forecasts 207,000 million yen in net sales, 28,000 million yen in ordinary income, and 15,700
million yen in net income for the full year ending March 31, 2008.
While the Group expects the market to remain solid, supported by strong levels overall of capital
expenditure related to water processing and factory operating rates at client companies, concerns remain
regarding the impact on corporate earnings from Asian economic trends, movements in crude oil prices,and foreign exchange trends.
In this environment, to ensure that targets set in the medium-term management plan, Growth 2008 (G-8),
are achieved, the Group will focus on expanding its business and securing earnings by accelerating theshift into the ultrapure water supply business and other service businesses, expanding business globally,
and continually strengthening administrative functions and the Group's operating base.
2

Outlook by Segment
Water Treatment Chemicals
With regard to water treatment chemicals, factory operating rates at clients, which have a large impact on
the Group's order intake, are expected to remain solid. However, there are concerns that increased
cost-cutting efforts by clients along with cost increases in this segment, due to rising costs of oil and basic
materials, may adversely affect the segment's profitability. Under such circumstances, the Group aims tofurther expand sales of its mainstay products and will also strive to maintain and increase order flows bybolstering efforts to build close client relationships, thereby facilitating sales based on proposals tailored
towards resolving the issues that clients face.
The Group will continue its efforts to secure earnings by reducing manufacturing and logistics costs forwater treatment chemicals and accelerating the development of new, high-value-added products.
Water Treatment Facilities
Capital expenditures on water treatment facilities in the overall manufacturing sector are expected to belargely robust, although there are concerns that reductions in the scale of capital expenditure projects andthe completion of the current round of capital expenditures in the electronics industry may adversely
affect the segment's performance. In this environment, the Group aims to maintain and increase orderflows by further expanding its services businesses, such as the ultrapure water supply business, toolcleaning services, and maintenance services, and pursuing concentrated sales efforts targeting Asianmarkets—with a focus on China, Taiwan, and South Korea—and strategic clients.
Furthermore, the Group will focus on securing earnings by continuing with efforts to enhance quality,
reduce costs, and shorten delivery times.

Profit Distribution
The Company's basic policy is to maintain stable dividend payments, and an interim dividend of 15 yen
per share has been set for the current period. Taking into account the Group's business performance, andto reward shareholders for their support, the Company intends to raise the year-end dividend by 2 yen to
17 yen per share. This results in a projected annual dividend of 32 yen per share.
Moving forward, the Company will continue its commitment to the basic policy of maintaining stabledividend payments. The Company will also strive to increase dividends while taking account of trends in
its business results and increasing and utilizing retained earnings.

Financial Condition (Cash Flows)
Consolidated net cash and cash equivalents at the end of the interim period were 38,197 million yen,representing an increase of 755 million yen, or 2.0%, from the end of the previous fiscal year.
Net cash provided by operating activities amounted to 12,936 million yen, a decline of 1,212 million yen
from last year's interim figure. This primarily reflects net inflows in the form of income before income
taxes of 13,999 million yen, a 11,460 million yen decrease in trade notes and accounts receivable, anddepreciation and amortization totaling 4,244 million yen, which were offset, however, by an 8,554 million
yen decrease in trade notes and accounts payable and the payment of income taxes in the amount of 7,102
million yen.
Net cash used in investing activities was 10,143 million yen, a decline of 242 million yen from a year
earlier, primarily reflecting an 11,036 million yen outflow for the acquisition of tangible fixed assets suchas equipment for use in the ultrapure water supply business.
Net cash used in financing activities was 2,268 million yen, an increase of 631 million yen from a year
earlier, mainly reflecting dividend payments of 1,977 million yen.

3

Cash Flow Indicators
Fiscal year
ended
March 31,
2004
70.1

Fiscal year
ended
March 31,
2005
70.9

Fiscal year
ended
March 31,
2006
68.3

Fiscal year
ended
March 31,
2007
66.7

Six months
ended
September
30, 2007
68.6

Equity ratio (%)
Equity ratio (based on market
96.3
112.7
152.3
155.9
210.9
capitalization) (%)
Interest-bearing debt to cash
21.3
13.8
8.9
4.1
6.6
flow ratio (%)
Interest coverage ratio (times)
206.4
230.5
322.2
601.6
562.4
Notes:
1. All indicators are calculated using financial figures produced on a consolidated basis.
2. Market capitalization is calculated by multiplying the closing stock price at the end of the period by the
number of shares issued and outstanding (excluding treasury stock) at the end of the period.
3. The cash flow variable used in the calculations represents cash flow from operating activities.
4. Interest-bearing debt refers to all debts recorded on the consolidated balance sheet that incur interest
payments.

Business Risks
Major risk factors that could affect the Group's future performance include, but are not limited to,
economic trends, trends in capital expenditure related to water treatment facilities and factory operating
rates at client companies, price movements in basic materials, and competition with industry peers.
Factors that may affect the Group's business performance
The performance of the water treatment chemicals business is affected by fluctuations in demand levels
reflecting changes in factory operating rates at companies in the steel, petroleum refining andpetrochemical, and pulp and paper industries—the Group's main sources of clients for the business. The
Group's business performance is also affected by movements in the prices of basic materials.
The performance of the water treatment facilities business is affected by demand fluctuations caused bytrends in capital expenditures at companies in electronics related industries, the Group's main source ofclients for the business. The Group's business performance is also affected by movements in the prices ofmajor raw materials and outsourcing costs, which influence equipment production costs.
The Group considers the potential impact of exchange rate movements on its business performance to be
insignificant as its overseas operations account for only a small proportion of its overall sales.

About the Kurita GroupThe Kurita Group provides a wide range of products, technologies, and maintenance services related towater treatment. The two core lines of the Group's business consist of: 1) water treatment chemicals used
for boiler water, cooling water, and wastewater and in manufacturing processes; and 2) water treatment
facilities such as ultrapure water production systems and wastewater treatment facilities. The scope ofboth business lines includes production, sales, and maintenance services. For additional information about
the Kurita Group, please visit the Company's website at: http://www.kurita.co.jp/english/.

Forward-Looking Statements
This news release contains various forward-looking statements which are based on current expectations
and assumptions regarding future events. Except for the historical information contained herein, allfigures and statements with respect to future performance, projections, and business plans of the Kurita
Group constitute forward-looking statements. Although Kurita believes that its expectations andassumptions are reasonable, actual results and trends in the Group's performance could differ materiallyfrom those expressed or implied by such figures and statements due to risks and uncertainties

4Condensed Financial Statements - Consolidated
Condensed Balance Sheets - Consolidated(In million yen)

As of
September 30,
2007 (A)

As of
As of
September 30, March 31, 2007
2006 (B)(C)

Change(A) – (B)(A) – (C)[Assets]
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - tradeMarketable securities
Inventories
Deferred tax assets
Other
Allowance for doubtful accounts
Fixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Total assets[Liabilities]
Current liabilities
Notes payable - trade
Accounts payable - trade
Short-term borrowings
Accounts payable - other/accrued
expenses
Income taxes payable
Advances received
Accrued employees’ bonuses
Allowance for product warranty
Other
Fixed liabilities
Long-term borrowings
Deferred tax liabilities related torevaluation
Accrued employees’ retirement
benefits
Accrued retirement benefits for
directors and corporate auditors
Other
Total liabilities[Net assets]
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Valuation and translation
adjustments
Minority interests
Total net assets
Total liabilities and net assets

128,70238,5489,400
56,547
5,593
14,572
2,699
1,515
(175)
109,196
79,448
2,641
27,105
237,899

127,527
32,48810,00958,084
7,831
15,363
2,222
1,659
(132)
89,60859,4372,806
27,364217,136

137,004
37,761
10,32066,7605,830
12,065
2,713
1,716
(164)
98,13367,2882,607
28,237
235,137

1,174
6,059
(608)
(1,536)(2,237)
(790)
476
(143)
(43)
19,58720,010(164)(258)
20,762(8,301)
786(919)(10,212)
(236)
2,507
(14)
(200)
(11)
11,063
12,16034(1,131)
2,761

61,4281,888
24,486140
16,087
5,978
7,233
2,805
1,089
1,718
11,62370

55,354
2,219
29,316
296
9,669
4,620
4,305
2,689
828
1,407
11,357
195

65,4962,433
32,318333
13,141
7,498
4,920
2,327
1,230
1,291
11,440
96

6,074
(331)
(4,829)
(156)
6,418
1,358
2,928
115
261
310
265
(125)

(4,067)(545)(7,832)(192)
2,945(1,519)
2,313
477
(140)
426
182
(25)

1,526

1,526

1,526

-

-

8,660

8,327

8,392

333

267

603

570

696

33

(92)

762
73,052738
66,712729
76,937

24
6,340

33
(3,885)

159,091
13,45011,426
139,034(4,820)147,153
13,45011,426
127,073(4,797)

153,519
13,45011,426
133,446(4,803)

11,938
11,960
(22)

5,571
5,588
(16)

4,152

1,914

3,252

2,237

899

1,602
164,847
237,899

1,356
150,424
217,136

1,427
158,200
235,137

246
14,422
20,762

174
6,646
2,761

5

Condensed Statements of Income - Consolidated(In million yen)Six months ended
Six months ended
September 30, 2007 (A) September 30, 2006 (B)(A) – (B)Year ended
March 31, 2007

Amount94,11262,45931,652

%
100.0
66.4
33.6

Amount86,381
58,41527,965

%
100.0
67.6
32.4

Amount
7,731
4,044
3,687

Amount197,146
137,819
59,326

%
100.0
69.9
30.1

18,15619.3

17,35720.1

799

35,05017.8

Operating income
Non-operating income
Non-operating expense
Ordinary income
Extraordinary losses
Income before income taxes
Income taxes
Minority interests in earnings ofconsolidated subsidiaries

13,496693
126
14,06363
13,999
6,328

14.3
0.7
0.1
14.9
14.9
6.7

10,608460
151
10,91669
10,847
4,536

12.3
0.5
0.2
12.6
12.6
5.3

2,888
233
(25)
3,147
(6)
3,152
1,792

24,276
1,242
293
25,226634
24,591
10,070

12.3
0.6
0.1
12.8
0.3
12.5
5.1

148

0.2

164

0.2

(16)

314

0.2

Net income

7,522

8.0

6,145

7.1

1,377

14,207

7.2

Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses6

Statements of Cash Flows - Consolidated(In million yen)Six months
ended
September 30,
2007 (A)AmountSix months
ended
September 30,
2006 (B)
Amount13,9994,244-(A) – (B)Year ended
March 31, 2007

AmountAmount10,847
3,083
-

3,152
1,161
-

24,591
6,512
(56)

(71)

57

(128)

(172)

463
247
(86)
(243)
(344)
(238)
23
99
49
11,460(2,416)328(8,554)2,294(1,721)(14)
52
19,570
406
180
(23)
(93)
(7,102)
12,936

295
46
187
169
(326)
(97)
21
77
72
9,431
(7,283)
129
(317)
2,246
(435)
(242)
17,963
365
88
(17)
(50)
(4,201)14,148

168
201
(273)
(412)
(18)
(141)
2
22
(23)
2,029
4,867
199
(8,237)48(1,286)
(14)
294
1,607
41
92
(6)
(43)
(2,901)(1,212)

(66)
103
119
694
(566)
(350)
50
745
141
708
(3,945)
98
2,192
2,846
1,256
(230)
34,673
649
360
(45)
(536)
(8,032)
27,070Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of marketable securities
Proceeds from redemption/sale of marketable securities
Payments for purchases of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payments for purchases of investment securities
Proceeds from sale of investment securities
Other expenses
Other income
Net cash provided by (used in) investing activities(5,649)6,201(11,036)
27
(5)
554
(655)
418
(10,143)(63)
34(6,096)
6,324(10,061)
32
(133)
(501)
79
(10,385)

63
(34)
447
(123)
(975)
(5)
128
554
(154)
339
242

(113)
34
(11,124)
14,843(18,846)
43(1,224)
514
(786)
205
(16,453)

Cash flows from financing activities
Proceeds from and repayment of short-term borrowings
Proceeds from and repayment of long-term borrowings
Acquisition of treasury stock
Dividends paid
Dividends paid to minority shareholders
Net cash provided by (used in) financing activities

(212)
(61)
(16)
(1,933)(44)(2,268)

(127)
(64)
(3)
(1,419)(21)(1,637)

(85)
3
(13)
(514)
(23)
(631)

(81)
(192)
(10)
(3,086)(88)(3,458)

158

54

104

280

682

2,180

(1,498)7,438

37,442

29,871

7,571

29,871

72

132

(60)

132

38,19732,184

6,013

37,442

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of consolidation goodwill
Equity in earnings of unconsolidated subsidiaries andaffiliates
Increase (decrease) in accrued bonuses
Increase in allowance for employees’ retirement benefits
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in other allowancesInterest and dividend income
Other non-operating income
Interest expense
Other non-operating expenses and extraordinary losses
Gains (losses) on sale/disposal of tangible fixed assets
Decrease in notes and accounts receivable - trade
Increase in inventories
Decrease in other current assets
Increase (decrease) in notes and accounts payable - trade
Increase in advances received
Increase (decrease) in other current liabilities
Bonuses paid to directors
Other
Sub totalInterest and dividend received
Other non-operating income received
Interest paid
Other non-operating expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

Effect of exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of theperiodCash and cash equivalents of newly consolidated
subsidiaries at the beginning of the period
Cash and cash equivalents at the end of the period7

Segment Information
By business type for six months ended September 30, 2007 (April 1, 2007 to September 30, 2007)(In million yen)

I. Sales and operating income
Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Operating cost and expenses
Operating income
II. Assets, depreciation and capital
expenditures
AssetsDepreciation and amortization
Capital expenditures

Water
treatmentchemicals

Watertreatment
facilities

Total

28,875
154
29,03024,031
4,998

65,23653
65,29056,795
8,495

94,112
208
94,32080,827
13,493

(208)
(208)
(211)
2

94,112
94,11280,615
13,49637,992834
654

144,053
3,409
15,694

182,045
4,244
16,34855,853-

237,899
4,244
16,348Eliminationor
corporate

Consolidated

By business type for six months ended September 30, 2006 (April 1, 2006 to September 30, 2006)(In million yen)

I. Sales and operating income
Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Operating cost and expenses
Operating income
II. Assets, depreciation and capital
expenditures
AssetsDepreciation and amortization
Capital expenditures

Water
treatmentchemicals

Watertreatment
facilities

Total

27,694122
27,81623,1604,655

58,68629
58,71552,764
5,951

86,381
151
86,53175,925
10,606

(151)
(151)
(152)
1

86,381
86,38175,773
10,60837,395792
570

126,513
2,278
7,906

163,909
3,070
8,476

53,227-217,136
3,070
8,476

Eliminationor
corporate

Consolidated

By business type for year ended March 31, 2007 (April 1, 2006 to March 31, 2007)(In million yen)

I. Sales and operating income
Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Operating cost and expenses
Operating income
II. Assets, depreciation and capital
expenditures
AssetsDepreciation and amortization
Capital expenditures

Water
treatmentchemicals

Watertreatment
facilities

Total

56,667262
56,93048,123
8,806

140,47978
140,557
125,086
15,471

197,146340
197,487
173,20924,278

(340)
(340)
(339)
(1)

197,146
197,146
172,870
24,27637,726
1,648
1,324

141,952
4,864
18,238

179,679
6,512
19,56355,458-235,137
6,512
19,563Eliminationor
corporate

Consolidated

8

Overseas Sales
Six months ended September 30, 2007 (April 1, 2007 to September 30, 2007)(In million yen)

I. Overseas sales
II. Consolidated net sales
III. Ratio of overseas sales to total
consolidated sales

Asia

North
America

Europe

Other

Total

9,222
-

1,980
-

927
-

1,075
-

13,205
94,112

9.8%

2.1%

1.0%

1.1%

14.0%

Six months ended September 30, 2006 (April 1, 2006 to September 30, 2006)(In million yen)

I. Overseas sales
II. Consolidated net sales
III. Ratio of overseas sales to total
consolidated sales

Asia

North
America

Europe

Other

Total

9,761
-

1,438
-

609
-

939
-

12,74986,381

11.3%

1.7%

0.7%

1.1%

14.8%

Year ended March 31, 2007 (April 1, 2006 to March 31, 2007)(In million yen)

I. Overseas sales
II. Consolidated net sales
III. Ratio of overseas sales to total
consolidated sales

Asia

North
America

Europe

Other

Total

22,635
-

3,424
-

1,296
-

2,171
-

29,528
197,146

11.5%

1.7%

0.7%

1.1%

15.0%

Notes:
1. Geographic segmentation is based on geographic proximity.
2. Major countries or regions in each segment are as follows:(1) Asia:
Korea, China, Taiwan, Singapore, Indonesia, and Thailand(2) North America:
U.S.A.
(3) Europe:
Germany(4) Other areas:
Brazil3. “Overseas sales” includes sales by the Company and its consolidated subsidiaries to countries orregions other than Japan.

9