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A chemical company providing new values
through innovative technologiesg
Code: 4114
arc
Investor & Public Relations Dept.
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.
2. NIPPON SHOKUBAI – Who we are
.
4. New Business
.
6. Return Policy
SAP: Superabsorbent Polymers
AA: Acrylic Acid
AES: Acrylates
EO: Ethylene Oxide
EG: Ethylene Glycol
NAII: NA Industries, Inc. (USA)
NSI: PT.NIPPON SHOKUBAI INDONESIA (Indonesia)
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 2
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1. Introduction
Ja anese Functional Chemicals:Ja anese Functional Chemicals:
Hold major share of world market
apanese compan es o a ar arger s are o e g o a
functional chemicals market than they do the automotive,
electronics, and electronic parts markets.
Lead the world in innovation Advances in functional chemicals brings about innovation at
manu ac urers o assem e pro uc s au omo es an
electronics)
Su ort industr and lifest les worldwide
Functional chemicals are fundamental materials for all
manufacturing and constitute a vital part of everyday life.
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 3
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1. Introduction
Ni on Shokubai Products and Technolo :Ni on Shokubai Products and Technolo :
Hold major share of world market
(more than 25%)
Acrylic Acid: Nippon Shokubai technology supports approximately
’
Lead the world in innovation The permeability of SAP helps make disposable diapers thinner.
Electronics and information materials help make displays thinner
and enable high definition properties.
Demand in a wide range of sectors stabilizes sales performance.
High proportion used for manufacturing of daily
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 4
necessities, making demand less vulnerable to economic
downturn.
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2. NIPPON SHOKUBAI
- Who we are
FY 3/2011 Record in income
Growth reflects demand
f
FY 3/2012 New record in income
Fully prepared for increase
from emerging markets in
Asia and other regions
in demand following
Lehman shock due to timely
increase in capacity
Feb. 2012 Ethylene Oxide +70,000 (Kawasaki) 324,000 tons/year
Apr. 2012 Acrylic Ac id +80,000 (Himeji ) 620,000 tons/year
Oct. 2012 SAP +60,000 (Himeji) 470,000 tons/year
First half: Price of raw materials surges
Second half: Demand drops sharply
Major loss from revised inventory valuation
(100 million yen)
300
350
3,000
3,500
Ordinary Income Sales
Across-the-board cost cutting while
maintaining employment150
200
250
1,500
2,000
2,500
Increase supported by rise in capital investment50
100
500
1,000
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.
5
2005 2006 2007 2008 2009 2010 2011 (projections)
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2. NIPPON SHOKUBAI
- Who we are
- a or ro uc s
Petroleum
Ethylene Propyleneaphtha
Ethylene
Basic chemicals
Acrylic
A id
xide
Ethylene
glycols
Acrylates
Acid
Carboxylic
Superabsorbent
Functional
chemicals
Polymer for
Carboxylic
acid
polymers
polymer
E I
materials
y
paints, adhesive
s, and tackifiers
Specialty
acrylates
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 6
Environment&
catalysts
Automotive
catalysts
Zirconia
sheet
Process
catalysts
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2. NIPPON SHOKUBAI
- Who we are
FY3/2011
Basic chemicals Functional chemicals
Environment & catalyst
8%
43%
Core business
49%
Core business
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.7
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2. NIPPON SHOKUBAI
- Who we are
Established August 1941
Common stock 25 038 million enommon stock
(As of March 31, 2011)
Net sales 288,345 million yen
(Consolidated Statements, FY3/2011)Number of employees 3,576
,
Stock listings Tokyo Stock Exchange, First Section
Osaka Securities Exchan e First Section
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 8
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2. NIPPON SHOKUBAI
- Who we are
1941
・Succeeded in first commercial production of
1941
1943
・Opened Suita Plant
<Technological Innovation>
(1) Founding —This year marks 71st
anniversary1941
Succeeded in first commercial production of
phthalic anhydride in Japan.
1952
・Succeeded in mass production of maleic
anhydride by oxidation of benzol.
C i li d d ti f th l id f
1949
・Renamed Nippon Shokubai Kagaku Kogyo Co., Ltd.
1959
・Opened Kawasaki Plant (the present Chidori
Plant of the Kawasaki Plants)
1960
1943
・Opened Suita Plant
1959
・Commercialized production of ethylene oxide for
the first time in Japan with our own technology.
1960
・Opened Himeji Plant (the present Himeji Plant)
1967
・Opened Kawasaki Second Plant (the present
Ukishima Plant of the Kawasaki Plants)
1988
・Established NA Industries, Inc. in Tennessee,
USA
1970
(5) Global expansion begins
-
Added to strategic products
(3) AA/AES -Core products for 40 years
USA.
1991
・Renamed NIPPON SHOKUBAI Co., Ltd.
1996
・Established PT. Nisshoku Tripolyta Acrylindo in
Indonesia (the present PT. NIPPON SHOKUBAI
INDONESIA)
1983
(4) SAP - Primary core products for 30 years
1998
・Established NIPPON SHOKUBAI ASIA PTE
LTD. in Singapore
1999
・Established NIPPON SHOKUBAI EUROPE
N.V. in Belgium
INDONESIA)
1987
・Started production of polymers for concrete
admixture
1997
・Started production of dioxins decomposition
catalysts
2003
・Established NISSHOKU CHEMICAL INDUSTRY
CO., LTD. in China
catalysts
2000
・Started production of functional dyes.
2004
・Established SINGAPORE ACRYLIC PTE LTD. &
SINGAPORE GLACIAL ACRYLIC PTE LTD. in
Singapore
2006
・Started production of acrylic resins for optical
(6) Electronics and information materials
business takes root
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 9
2008
・Acquisition of the major shares of NIPPON
NYUKAZAI Co., LTD. and SINO-JAPAN CHEMICAL
Co., Ltd.
2006
Started production of acrylic resins for optical
materials
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2. NIPPON SHOKUBAI
- Who we are
Masanori Ikeda Presidentasanori Ikeda President
Graduated from Tokyo University, received an MBA from Cornell
University.
2003: Member of the Board of Directors; 2006: Managing Director; 2009:
Senior Managing Director; 2010: Executive Vice President
Led many overseas projects, including NAII. Played an important role in
our global expansion.
Primarily engaged in corporate planning. Demonstrated abilities in
implementing ERP (integrated enterprise system) and acquiring Nippon
Nyukazai, etc. Leveraged extensive experience in general business
operations to contribute to the ongoing success of the company.
Continuing the present course. Aims to achieve not only the numerical
targets of TechnoAmenity 2015, but also the substance.ee s e u con ence o s a e o ers roug ro us ac v es.
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 10
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2. NIPPON SHOKUBAI
- Who we are
Slogan:
Challenge to the future make dreams come true
logan:
Challenge to the future make dreams come true
Corporate Philosophy
Management Philosophy
Slogan:
Challenge to the future, make dreams come true
logan:
Challenge to the future, make dreams come true
Providing affluence and comfort
to people and society,
with our unique technology
Based upon a deep respect for humanity
Coexisting with society, and working in harmony
with the environment
Pursuing innovative technology
with our unique technology
Operating on the global stage
A chemical company providing new values
th h i ti t h l i
A chemical company providing new values
th h i ti t h l i
ision
2010 – 2015 Six-Year Business Plan
through innovative technologieshrough innovative technologies
Undertake steady global expansion of AA/SAP
Improve profitability of current products (Profitability Improvement Committee)
Get new businesses (materials for E&I, new energy, batteries) on track
11
( , gy, )
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2. NIPPON SHOKUBAI
- Who we are
Vision/Target for
FY2025E&I New
Current
Health,
us ness or o o
Materials Energy
Current
Business
Medical
Make one of the Fuel cell Improve Medical
Level to attain
in
centerpieces of
profit generation materials profitabilitymaterials
Functional
foodales
¥30 billi
Sales
¥5 billi
Profitability
Improvement
Technology-related ”green” chemistry, environmental protection
FY2015
¥30 billion ¥5 billion
Improvement
committee
Technology related green chemistry, environmental protection
and evaluation
Catalyst, organic synthesis, polymer composition and production
Now
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved. 12
technologies
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2. Main Business
Propyleneropylene
Acrylic acid
Direct acrylic acid sales
Basic chemicals
Acrylates
F ti lunctional
chemicals
etc….
Superabsorbent polymer
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etc….
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2. Main Business
Leading Manufacturereading Manufacturer
Worldwideorldwide
Superabsorbent
Worldwideorldwide
Superabsorbent
polymer
(SAP) *
Major application: Disposable diapers
14
ow ere po ymer, e pr nc pa raw ma er a e ng
acrylic acid. A single gram of this polymer is able toabsorb as much as 1,000 grams of liquid.
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2. Main Business
Preventing Desertification
Preventing Desertification
15
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2. Main Business
Supply and Demand TrendsSupply and Demand Trends
Demand Strong growth expected in line with economic growth in developing
countries
7 to 8% annual growth7 to 8% annual growth
Global demand: approx. 1.7 million tons (2010 estimate)
Supply Emerging manufacturers, besides current majors, are planning to
enter and expand SAP businsess
Reinforcement of Nippon Shokubai Facilities
October 2010 Himeji: 60,000 t/year―In operation
June 2012 America: 60,000 t/year―Build & scrap
August 2013 Indonesia: 90,000 t/year―Scheduled
―
Progressing as
planned
16
,
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2. Main Business
Maintain the ToMaintain the To --Class Market Share and Ensure ProfitabilitClass Market Share and Ensure Profitabilit
The Basis of Nippon Shokubai’s SAP Strength
1) R&D strength in products and processes
2) Integrated production from raw materials, AA
3) Stable supply network based on productionfacilities in Japan, US, Europe and China
4) Intellectual property strategy to maintaineffectiveness of technology
5) Excellent customers with strong growth
Risks and Countermeasures
1) New entrant products in developing countries gathering strength
• General cost reductions through process innovation including AA, production efficiency,
and streamlined logistics
• Proper implementation of intellectual property strategy
17
2) Reduced price competitiveness due to strong yen
• Increase production at facilities with less risk from strong yen
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2. Main Business
Paints (Acrylates) Adhesives and tackifiers
(Acrylates)
Printing ink
(Acrylates)
18
Diapers (AQUALIC CA) Water retaining agent for
horticulture (ACRYHOPE)
Car paints
(Specialty acrylates, specialty methacrylates)
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2. Main Business
Supply and Demand TrendsSupply and Demand Trends
5 to 6% annual5 to 6% annual rowthrowth
Global demand approx. 4 million tons (2010 estimate)
Easing of supply and demandEasing of supply and demand
Calender year 2010 2011 2012 2013
Demand (A) 3,960 4,150 4,340 4,550
isis expected in the midexpected in the mid--termterm (Kt)
Annual available supply (B) 5,140 5,270 5,850 6,240
Nominal operating rate (A/B) 77% 79% 74% 73%
Reinforcement of Ni on Shokubai Facilities
Growth based on increased demandGrowth based on increased demand
April 2010 Himeji: 80,000 t/year -In operation
August 2013 Himeji: 80,000 t/year -Scheduled
August 2013 Indonesia: 80,000 t/year -Scheduled
Progressing
as planned
19
The majority of Shokubai’s expanded AA facilities are used for internal use for SAP production and
external sales to the other SAP producers.
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2. Main Business
AA facilities (Kt/y)
SAP f iliti (Kt/ )
Belgium (Antwerp)
SAP facilities (Kt/y)
60
China (Zhangjiagang)
540
320
60
60 60
60
U.S. (Houston)
Singapore (Jurong Island)
Japan (Himeji)
40
9040
ingapore (Jurong Island)
Indonesia (Cilegon)
9040
Current End of 2014
AA 620 780
Production capacity (Kt/y)
AA 620 780
SAP 470 590
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2. Main Business
AA Production Capacity
590Kt/y
Worldwide total: Over 5 million tons
SAP Production Capacity
Worldwide total: Over 1.7million tons
1,500
2
500
600
Kt/y590Kt/y
(End of 2014)
780Kt/y
6
1,000
47
300
400
780Kt/y
(End of 2013)
62
47
100
200
A B Nippon
Shokubai
C D Others Nippon
Shokubai
A B C D Others
21
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2. Main Business
Ethylene
Ethylene oxide
Direct ethylene oxide sales
thylene oxide
Direct ethylene oxide sales
Ethylene glycol
Basic
Chemicals
Ethylene glycol
Ethanolamine
Higher alcohols
Functional
Chemicals
Polymers for concrete admixture
g
22
Chemicals
etc....
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2. Main Business
Fabric detergents
Polyester resins Synthetic detergents
abric detergents
(Ethylene oxide, Ethanolamine,
SOFTANOL)
Polyester resins
(Ethylene glycol)
Synthetic detergents
(SOFTANOL)
PET resins
(Ethylene glycol)
Polymers for concrete admixture
(AQUALOC)
23
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2. Main Business
Establish an Earnin s Base That Does Not De end on the State of the MarketEstablish an Earnin s Base That Does Not De end on the State of the Market
Non-EG ratio: Keep of over 70%
Domestic avera e includin Ni on Shokubai 50%
EO centralization
Expansion of derivatives
October 2013 Kawasaki Plant (new land acquired in 2007) new 20,000 ton/yfacilities on stream
* Meet the growing demand
* Reduction in quantity of EO shipped
2) Expansion of polymer for concrete admixture
April 2012 Kawasaki Plant (existing premises) 16,000 ton/y facilities scheduled3) Launch of drying shrinkage reducing agent for concrete
Jointly developed with 3 construction majors, with commercial production fromOctober 2011
24
Aim for flexible product configuration as a top priority Aim for flexible product configuration as a top priority
to improve facility utilizationto improve facility utilization
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4. New Business
Acrylic resin for optical materials “Acryviewa ”
ey ource o evenueey ource o evenue
2012
Resist polymers
Product under develo ment: Enca sulatin materials for SiC ower
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.
devices
25
4 N B i
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4. New Businesses
--
Materials for fuel cells (zirconia sheets and cells)
volume of previous fiscal year
FY3/2016 Long-term sales target: 5 billion yen
M ldi d fi i t h l i lti tolding and firing technologies cultivate
through catalyst manufacturing
High quality + mass production
3 million pieces/year in 2011
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.
. .
26
4 N B i
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4. New Business
Materials for lithium-ion batteries
Lithium bis(fluorosulfonyl)imide (LiFSI)
Features: Life extension for lithium-ion batteries
and greatly improved safety
Strong points: Established synthesis technology using original
catalysts enabling mass production of high-purityatalysts, enabling mass production of high-purity
products cheaply (first in the world)
Ensure production capacity of several hundred tons
per year n
FY3/2013 Scheduled for launch
FY3/2016
Aim for sales of ¥2 billion
Solid electrolyte polymer for lithium-ion batteries
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.
Aim for early launch27
5 Development of
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5. Development of
New Technologies
New method: Glycerine method from biomass resources
OHGlycerine
Dehydrate
OH OH
CH2
Acrolein
CH2
OH
Acrylic acid
Developed high-
performance
catalysts
Oxidation
Ocrolein
Acrylic acid
Current method: Propylene oxidation
catalysts
Polymerization
SAP,
Adhesives.
Paints
Current method: Propylene oxidation
CH 2
Propylene
Oxidation
Copyright 2011 NIPPON SHOKUBAI CO., LTD. All rights reserved.
Paints,
etc.
C H 3Oxidation
28
6 Return Policy
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6. Return Policy
,Taking overall account of business expansion and corporate structuralTaking overall account of business expansion and corporate structural
Reinforcement, and based on forecasts of the trend in consolidated earnings,Reinforcement, and based on forecasts of the trend in consolidated earnings,
we are aiming to improve dividend return levels in the medium termwe are aiming to improve dividend return levels in the medium term
xpans on o nves men n ore us nesses arge n erna eserves
FY3/2011 dividend
Net Income 21.1 billion en
FY3/2012 dividend (forecast)
Net Income 21.5 billion en
22 yen/share 22 yen/share
Yen/share Interim End of period Total 2 yen/share increaseOrdinary
dividend9 9 18
Commemorative
dividend* 1 1 + 2 4
Total 10 12 22
Yen/share Interim End of period Total
vs. to the previous announcement
* 50th anniversary of the Himeji Plant (2 yen) and 70th anniversary of NIPPON SHOKUBAI (2 yen)
%FY3/2005-3/2011
7-year average
FY3/2007-3/2011
5-year average
dividend11 11 22
Commemorative
dividend- - -
Total 11 11 22
29
Average payou t ratio 25.6 28.5
Average total rate ofreturn
40.2 37.7
8 million treasury shares were cancelled.
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“ ”
information, not to solicit investment. The Material contains forward-looking
statements, and statements of this nature are based on reasonable judgments in
accordance with information currently available. We neither commit to nor guarantee
the contents of the Material. Readers should be aware that actual results and events
might differ substantially from these projections.
IR Contacts:
NIPPON SHOKUBAI CO., LTD.
Investor & Public Relations Dept.
Hibiya-Dai Bldg. 1-2-2 Uchisaiwai-cho, Chiyoda-kuTokyo 100-0011 Japan
TEL: +81-3-3506-7477
FAX: +81-3-3506-7598
30
URL: http://www.shokubai.co.jp