Head Office : 5fl Kukdong Bldg., 60-1 Chungmuro 3ga, Junggu, Seoul Yeosu Plant : 7-6 Walnaedong, Yeosu City, JeollaNamdo / Busan Office : 150-6 Geojedong, Yeonjegu, Busan

www.huchems.com

03HUCHEMS

Open

Management

Global

ManagementTechnology

Management

Management

Policy

Pride

ActionGoals

MOTTOHuchems was established as a specialist fine chemical company,

when it separated from Namhae Chemical in September 2002.

With 14 manufacturing plants in Yeosu Plant Complex, Korea,

Huchems provides industrial chemicals including nitric acid, DNT and MNB,

as well as basic chemical products, such as ammonia and urea to its customers

creating stable revenues every year.

Huchems has also expanded its business scope into the environmental industry,

and is now occupying a leading position in the greenhouse gas

emissions reduction market in Korea, thus contributing to the environmental

conservation of our planet.

Huchems is dedicated to providing the highest level of satisfaction

for its customers, stockholders and employees.

To develop into a world-class fine chemical company, we will continually

focus on enhancing competitiveness of our core business

and achieving business diversification and globalization.

Contents0 3 .0 6 .0 8 .1 4 .1 6 .1 8 .20 .2 2 .

Company IntroductionCorporate CultureChemicalsAqueous Urea SolutionCDMCorporate PartnerStocks and Corporate Management Vision

Established as Huchems Fine Chemical Corporation

(Split-off from Namhae Chemical Corporation)

Listed on the Korea Stock Exchange

Company-union peace agreement and corporate vision announced

Fourth Nitric acid plant completed

Listed on the KOSPI 200 Index

Huchems acquired by TaeKwang Ind. Co. Ltd.

Third Concentrated nitric acid plant and Sulfuric acid concentration

facility completed

CDM greenhouse gas reduction facility completed

MNB plant completed

Company Introduction

05HUCHEMS

Company Name : Huchems Fine Chemical Corporation

Establishment Date : September 15, 2002

Paid-In Capital : KRW 21,291 million

Number of Employees : 200

Homepage : www.huchems.com

LocationsHead Office 5fl Kukdong Bldg., 60-1 Chungmuro 3ga, Junggu, Seoul

Yeosu Plant 7-6 Walnaedong, Yeosu City, Jeollanamdo

Busan Office 150-6 Geojedong, Yeonjegu, Busan

Company Overview

Yeosu�Plant

Busan�Office

Seoul�Head�Office

History

Awards

2002. 09

2002. 10

2002. 1 1

2003. 07

2004. 06

2006. 07

2006. 12

2007. 04

2009. 04

2002. 12

2003. 03

2004. 05

2005. 06

2005. 12

2006. 07

2007. 11

2008. 11

Received ISO9001 Quality Management Certification &

ISO14001 Environmental Management Certification

Received Excellent Supplier Recognition Award from DuPont

(only recipient among Asian companies or chemicals companies)

Received Korea Marketing Best Award for Brand Leadership (KMCA)

Received KGS/OHSAS18001, Occupational Health and

Safety Management System Certification

Received the National Assembly Commerce, Industry and

Energy Committee’s Korea Valuable Management Award (Hankuk Ilbo)

Designated as an Environmentally-Friendly Company (Ministry of Environment)

Received Korea Idea Management Awards (Korea Suggestion System Association)

Acquired Safety Zone-Certi (Safety & Certificate Association of Korea)

07HUCHEMS

Corporate Culture

Through environmental management to protect nature and humankind, social contribution through community service and transparent ethical management, Huchems is creating a better world for every customer, stockholder and employee.

Ethical Management

In carrying out its management activities, Huchems is dedicated to fulfilling its economic and legal

responsibilities, and is committed to sound corporate ethics as well. At Huchems, respect for all

humankind, customers, the law, corporate partners and employees form the essence of the company’s

management strategy. Huchems is striving to contribute not only to the economic development

of society but also to global prosperity and well-being.

Community Care

Through the Huchems Volunteer Service Team, Huchems is engaged in diverse social service

activities. With the Seoul headquarters delivering ‘Lunch Boxes of Love’to seniors living alone

and the Yeosu plant’s close partnership with local facilities for the disabled,

Huchems continuously fulfills its corporate social obligations.

As a trustworthy company dedicated to the service, Huchems will continue to spread

the joy of sharing among all sectors of society.

Environment, Safety and Health Management

Huchems gives top priority to the environment, safety and health in product-development, design,

production and transportation and observes all relevant rules and regulations. Huchems received

the ISO14001, Environmental Management Certification and the KGS/OHSAS18001, Occupational Health

and Safety Management System Certification through its accident-free and environmentally friendly

management. Considering safety and health for all employees and customers, Huchems pursues

eco-friendly initiatives throughout all stages of the manufacturing process, from R&D to waste-disposal

through its environment, safety and health management policies. Every employee is committed to

eco-friendly management by actively participating in environmental cleanup and accident prevention.

09HUCHEMS

ChemicalsChemicals

Huchems produces DNT, nitric acid, MNB, ammonium nitrate and other fine chemical products

that form the foundation of the domestic chemical industry, and supplies them to major domestic

and global chemical companies.

Nitric acid, DNT and MNB are used to produce TDI and MDI, which are raw materials

for the production of polyurethane, the essential material used to produce automobile interiors,

furniture and construction materials. Ammonium nitrate is used as an industrial explosive

in various civil works.

In addition, basic chemical products such as urea and ammonia are vital raw materials

for various industries, forming the cornerstone of domestic economic development,

as well as enriching our daily lives as intermediate materials used in the production of foods,

textiles and construction materials.

Huchems will continue to strengthen its competitiveness in the fine chemical industry

through business expansion and contribute to customer service, boosting Korea's

industrial competitiveness through constant R&D and new business development.

DNT (DiNitroToluene)

DNT is used to produce polyurethane, explosives, etc. and is used for styrofoam, plastics, artificial leather, etc

Applications

Chemical and

physical

properties

Packaging and

delivery

Caution

TDI(soft urethane foam), dye, explosives

∙Appearance : Yellow needle shape or brown crystal

∙Structural formula: 2,4/2,6 DNT Compounds

∙Molecular weight : 182.14(g/mol)

∙Specific gravity : 1.33(@ 20℃)

∙Freezing point : 54℃ Min.

∙Smell : Sweet aromatic scent

∙Water solubility : 180ppm(@ 20℃)

∙Solvent solubility : It dissolves in alcohol, ether, benzene

and acetone.

When leaked, it solidifies under normal temperature

MNB (MonoNitroBenzene)

MNB is used to produce polyurethane, MDI, etc. and also used for heat insulator compound wood, packaging materials,

artificial leather, etc

Applications

Chemical and

physical

properties

Packaging and

delivery

Intermediates of MDI(hard urethane foam), Aniline, perfumery

∙Appearance : Lemon yellow liquid

∙Smell : Sweet aromatic scent

∙Molecular weight : 123.11(g/mol)

∙Specific gravity : 1.206 ~ 1.212(@15~4℃)

∙Melting point : 5.4℃ Min.

∙Solvent solubility : It dissolves in alcohol, ether, benzene

and acetone.

DNT

Item Delivery

Tank lorry

Packaging

Bulk

MNB

Packaging

Bulk

ItemItem Delivery

Piping, Tank lorry

2,4 DNT 80% 2,6 DNT 20%

For the growth of chemical industry

Fine Chemicals Part

11HUCHEMS

Nitric acid

Nitric acid is used for polyurethane, dyes, nylon textiles, cosmetics, etc.

Products

Applications

Chemical and

physical

properties

Packaging and

delivery

Nitric acid 60%, 65%, 67%, 68%, 70%, Concentrated nitric acid 98%

Adipic acid, MDI, DNT, polyurethane, explosives, metal washing,

semiconductor etching solution

∙Appearance : Colorless or lemon yellow stimulus liquid.

It is very corrosive, and if it makes contact with air,

it produces stimulus white gas.

∙Smell : pungent odor

∙Molecular weight : 63.01(g/mol)

∙Water solubility : Very soluble

∙Solvent solubility : It dissolves in ether

Ammonium nitrate

Ammonium nitrate is used for explosives, semiconductor gas, anesthetic gas, etc. Huchems produces the

Ammonium nitrate with the types of liquid and prill.

Applications

Chemical and

physical

properties

Packaging and

delivery

Explosives, fertilizer, anesthetic gas, semiconductor gas

∙Appearance : Odorless and colorless, almost white, deliquescent

rhombus crystal or particle

∙Molecular weight : 80.04(g/mol)

∙Boiling point : 210℃

∙Melting point : 170℃

∙Specific gravity : 1.725(@ 25℃)

∙pH : 5.4(@ 0.1M solution)

∙Water solubility : 110%(@ 0℃)

∙Solvent solubility : It dissolves in acetone, Ammonia,

Methanol, ethanol

Item

60%/ 65%/ 67%

68%

70%

Packaging

Bulk

Bulk30/35kg Can280kg Drum

Bulk

Delivery

Tank lorry, ship

Tank lorry, shipContainerContainer

Tank lorry

Item

Prill type

Liquid type

Packaging

25/750kg Bag30/500kg Bag

Bulk

Delivery

ContainerCargo truck

Tank lorry

MNT (MonoNitroToluene)

MNT is used for dyes, pigments, and to produce fertilizers. Classified as o-NT, m-NT and p-NT,

depending on the position of the nitro group (-NO2).

Applications

Chemical and

physical

properties

'

Packaging and

delivery

Dyes, pigments, TNT, fertilizer, toluidine

∙Appearance : Yellow liquid with thin and unique smell

∙Molecular weight : 137.14(g/mol)

∙Boiling point : 222~225℃

∙Melting point : -10~-3℃

∙Specific weight : 1.16 (@ 20℃)

∙Water solubility : 0.06%

∙Solvent solubility : It dissolves in alcohol, ether, benzene,

chloroform, petroleum ether, sulfur dioxide

and most of organic solvents. It is lightly

soluble in ammonia.

P-Toluidine

Toluidine is used for dyes, pigments, and pesticides.

Applications

Chemical and

physical

properties

'

Packaging and

delivery

Dyes, pigments, pesticides

∙Appearance : Glossy white or colorless firm or plate

∙Molecular weight : 107.16(g/mol)

∙Boiling point : 201℃

∙Melting point : 44~45℃

∙Specific weight : 1.046 (@ 20℃)

∙pH : 10.5 (extracted from solution)

∙Water solubility : 0.74%

∙Solvent solubility : It dissolves in ethanol, ether, acetone,

pyrimidine, methanol, carbon disulfide,

oil and diluted acid

Item

o-NT

m-NT

p-NT

Packaging

Bulk230kg DrumISO Tank

230kg Drum

230kg Drum

Delivery

Tank lorryContainerISO Tank

Container

Container

Item

Toluidine

Packaging

180/190kg Drum190kg Drum

Delivery

Cargo truckContainer

Fine Chemicals PartFor the growth of chemical industry

Ammonia

Ammonia is used to produce fertilizer, Nitric acid, refrigerants, and used as a material of patentmedicine and seasoning.

Applications

Packaging and

delivery

Nitric acid, fertilizer, ricin, medicine, seasoning, metal surface treatment

Ammonia

Packaging

Bulk

Item Delivery

Tank lorry

Urea for Industry

Urea for Industry is used for resin, paints, feed, synthetic detergent, wastewater treatment, dyes, and it is used to produce adhesives.

Applications

Packaging and

delivery

Foaming agent, urea resin, feed, dye, pigment, wastewater treatment

Urea for Industry

Packaging

20/25/500/1000kg Bag Bulk

Item Delivery

Cargo truckBCT

Melamine

Melamine is used for MDF floor coating agents, tableware, car paints, and concrete compound.

Applications

Packaging and

delivery

Melamine resin, coating agent, car paints, concrete compound

Melamine

Packaging

25/500/1000kg Bag

Item Delivery

Cargo truck

Applications

Packaging and

delivery

MTBE for fuel oil, denatured alcohol, analytical reagent

Methanol

Methanol is used to produce MTBE for fuel oil, denatured alcohol and materials synthesis of formaldehyde. It is also called methyl alcohol.

Methanol

Packaging

Bulk

Item Delivery

Tank lorry

13HUCHEMS

Vertical integration provides synergic effects in energy conservation, by-product

utilization and logistics through vertical integration for Huchems’products.

Other Major ProductsFor the growth of chemical industry

Product Link Table

Chemical and physical properties

∙Appearance: Clear liquid

∙Smell: Smell of ammonia

∙Molecular weight: 60.06(g/mol)

∙Boiling point: 103℃

∙Freezing point: -11℃

∙Specific weight: 1.09(@ 20℃)

∙pH: 7~8

∙Water solubility: 32.5%

10L

Packaging

Delivery

∙Nox Clean : Doosan-infracore parts centers (parts.doosaninfracore.co.kr )

∙Nox Doctor : SK gas stations (www.danew.co.kr)

Sales

200L 1,000L Bulk

Aqueous Urea Solution

Increasing awareness of global warming and skyrocketing oil prices have directed

the global automobile industry's attention to environmentally-friendly technology.

With the enforcement of the Euro Ⅳ emission standards from January 2008 in Korea,

the need for economical anti-pollution technology has become even more immediate.

To meet this demand, Huchems has developed “Nox Clean and Nox Doctor,”high-quality

aqueous urea solutions that decompose atmospheric pollutants emitted by diesel automobiles.

Nox Clean and Nox Doctor are reducing agents designed for exhaust gas recirculation systems

using SCR(selective catalytic reduction) process that injects aqueous urea solution

into the exhaust system of a diesel engine to create a catalytic reaction,

converting harmful emission gas into harmless water and nitrogen.

Nox Clean and Nox Doctor not only remove harmful pollutants but increase fuel efficiency

by approximately 10%, offering an economical solution in an age of ever-rising fuel prices.

Huchems sells these products through Doosan-infracore parts centers as well as SK gas stations

across the country, and foresees substantial growth in demand for the product in the future as

the number of diesel automobiles continues to increase.

※ Enforcement of EURO Ⅳ engine exhaust gas emission levels

EURO Ⅳ, a standard of exhaust emission, applies to new vehicles such as heavy-duty trucks and buses

weighing over 3.5 tons.

15HUCHEMS

Urea solution for automobiles Nox Clean and Nox Doctor

<Permissible Emission Levels for automobiles> (g/KWh)

EURO Ⅲ 5.0 0.1

EURO Ⅳ 3.5 0.02

EURO Ⅴ 2.0 0.02 legislative notice from Sep. 2009

NOx PM remarks

Packaging 10/200/1,000L Bulk

Delivery Delivery service/Cargo truck Tank lorry

18HUCHEMS17HUCHEMS

Clean Development Mechanism

Huchems manages a Clean Development Mechanism business that sells CERs(Certificated

Emission Reductions) which is obtained by reducing greenhouse gas generated

during the nitric acid production process.

Since the Kyoto Protocol, CDM projects, which are quickly developing into a high growth industry,

allow for the sale of greenhouse gas emissions reduction credits to countries responsible

for reducing emissions if companies in developing nations attract foreign investment

and succeed in reducing gas emissions.

In cooperation with Carbon GmbH, Austria, Huchems installed nitrous oxide(N2O) reduction

facilities in three nitric acid plants, reducing 1.5 million tons of greenhouse gas emissions per year,

the equivalent of emissions produced by 700,000 automobiles.

Huchems has been selling CERs since April 2007, achieving economic advantages

and taking a leading position in the greenhouse gas emissions reduction market in Korea

and global environmental conservation

Moreover, in September 2008, Huchems secured a stake in KCF (Korean Carbon Finance),

the first company specializing in carbon trade & investment in Korea. Through this project,

Huchems is preparing a bridgehead for expanding CDM business outside Korea while leading a

carbon exchange market in Korea.

Business Areas

Business Effect

∙Installation of N2O reduction facilities in three nitric acid production plants.

∙Acquisition and sale of greenhouse gas emissions reduction credits.

∙Boosting profits by selling CERs.

∙Reduction of greenhouse gas equivalent of emissions produced by 700,000

automobiles per year, helping to lessen global warming.

∙Acquisition of greenhouse gas reduction technology, contributing to domestic CDM business.

∙Improvement of national credibility regarding the climate change convention by registering

its nitric acid plants with the UN, the third highest among 700 nitric acid plants worldwide.

Emission Reduction : 1.5 million tons per year (CO2)

Cheongdo TaeKwang Jehye Ind. Co. Ltd.

TaeKwang Vina Ind. Co. Ltd.

TaeKwang Ind. Co. Ltd.

CEO

Foundation

Address

Business

Employee

Park, Yeon Cha

1971

258-9 Andong, Gimhae city, Gyeongnam, Korea

Shoes manufacturing

700

19HUCHEMS

Corporate Partner

Foundation

Address

Area

Business

Local Investment

Employee

1995

Leewonjangjin, Raeseo, Chingdo, Sangdong, China

Land 261,000㎡ , Building 144,000㎡

Shoes manufacturing 7 million pairs/year

$ 70 million

13,000

Foundation

Address

Area

Business

Investment

Employee

1994

Vienhoa, HoChiMinh city, Dongnai, Vietnam

Land 272,000㎡ , Building 188,000㎡

Shoes manufacturing 10million pairs/year

$ 115 million

18,000

Huchems became an affiliated company of TaeKwang Industry Co. Ltd.,

as the company had acquired Huchems' stocks from NACF (National Agricultural Cooperative

Federation) in June 2006.

TaeKwang is Korea’s largest sports footwear manufacturer with a production

capacity of 17 million shoes per year. Founded in 1971, TaeKwang has been producing

top-of-the-line footwear for Nike thanks to its constant technological development and quality control.

After introducing global management in 1994, TaeKwang transferred its production facilities

to Vietnam and China, with its Korean facilities concentrating on new product research and quality

development. With thorough localization and social support activities, TaeKwang has contributed

to the improvement of Korea’s relations with Vietnam and China and enhancement of Korea’s

prestige abroad.

Through the synergic effects created by its partnership with TaeKwang,

Huchems will actively expand its operations abroad.

Stocks and Corporate Management

069260

21,290,932 shares

KRW 1,000

Stock code

Shares outstanding

Par value

Listed on the KOSPI 200 Index (since June 2004)

Stocks Overview Summarized Financial Statement

Shareholders

Balance Sheet

Income Statement

(Unit : KRW million)

(Unit : KRW million)

21HUCHEMS

As of Dec

Total assets

Current asset

Fixed asset

Total liabilities

Current liability

Long-term liabilities

Shareholders’equity

Paid-in capital

Capital surplus

Capital adjustments

Accumulated other comprehensive income

Retained earnings

Total liabilities & Shr’s equity

251,045

154,217

96,828

57,649

53,038

4,611

193,396

21,291

108,330

-

-

63,776

251,045

221,338

117,029

104,309

50,687

43,361

7,326

170,651

21,291

108,330

-

-

41,031

221,338

219,677

103,103

116,574

60,338

46,535

13,803

159,339

21,291

108,330

-

-

29,719

219,677

227,106

95,717

131,389

71,270

52,516

18,754

155,836

21,291

108,330

-

-

26,216

227,106

Year to Dec

Sales

Cost of sales

Gross profit

SG&A expenses

Operating profit

Non-operating income

Non-operating expenses

Pretax profit

Taxes

Net profit

301,750

242,330

59,420

21,675

37,745

4,493

2,349

39,889

11,608

28,281

2007

300,976

258,440

42,536

20,909

21,627

2,846

3,899

20,574

5,430

15,144

2006

275,943

244,864

31,079

19,010

12,069

3,426

3,440

12,055

3,774

8,281

2005

306,192

265,439

40,753

19,435

21,318

3,753

3,495

21,576

6,342

15,234

2004

2007

311,560

187,032

124,528

107,912

103,627

4,285

203,648

21,291

108,330

-19,445

-97

93,569

311,560

415,663

346,289

69,374

23,233

46,141

24,211

11,358

58,994

18,768

40,226

2008

2008 2006 2005 2004

37.5%

Mr. Yeon-Cha Park

Taekwang Industry

Jeongsan CC,et al

10.0%

NACF

4.0%

Treasury stock

21.5%

Minority shareholders

22.7%

Institutional investors

4.3%

Foreign investors

With its continuous commitment

to management that assures our clients,

stockholders and employees,

Huchems is Korea's leading fine chemical industry.

The entire staff of Huchems is committed

to strengthening the competitiveness of our existing

businesses through continued facility investment,

as well as boosting our global competitiveness

by developing new future growth drivers

in the environmental and energy industries.

From our dominant position in the Korean chemical

industry, Huchems is now poised to become

a global leader in fine chemicals, making a valuable

contribution to the prosperity of our industry,

our nation and the global community.

Globalization

Energybusiness

Environmental business

Future growth

drivers

Strengthen core business

A world-leading

fine chemical company

23HUCHEMS

Future growth

drivers