Mitsubishi Chemical Holdings Group Investors Meeting

2 2 The forward-looking statements are based largely on information available as of the date hereof, and are subject to risks and uncertainties which ...

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Mitsubishi Chemical Holdings Group Investors Meeting

December 9, 2008 Yoshimitsu Kobayashi, President Mitsubishi Chemical Holdings Corporation 1

The forward-looking statements are based largely on information available as of the date hereof, and are subject to risks and uncertainties which may be beyond company control. Actual results could differ largely, due to numerous factors, including but not limited to the following: Group companies execute businesses in many different fields, such as petrochemicals, carbon and inorganic products, information and electronics, pharmaceuticals, polymers and processed products, and these business results are subjected to influences of world demands, exchange rates, price and procurement volume of crude oil and naphtha, trend of market price, speed in technology innovation, National Health Insurance price revision, product liabilities, lawsuits, laws and regulations.

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Agenda „ APTSIS 10 Current Status „ Business Topics „ Carbon Business „ Li-ion Battery Materials Business

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APTSIS 10 Current Status „ Business Environment „ Acceleration of Restructuring Petrochemical Businesses „ Next-generation Growth Business „ White LED Project

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Business Environment APTSIS 10 assumptions (May 13, 2008)

Variables

Economic condition

Naphtha price

Economic downturn

68,000 yen/kl

Current status (December 2008) Global negative growth (’09-’10) No longer decoupling Weighted average of imported naphtha 4Q: 53,000 yen/kl (19,000 yen/kl*) * Referring spot price as of Dec.5

FOREX

105 yen/US dollar

92 yen/US dollar (as of Dec. 5)

Intensifying competition in advanced materials

Identify seven next-generation growth businesses

Prioritization

Drug price revision in Japan

Every other year

Every other year

Supply volume increase from the Middle East

• Excess supply • Global economic growth rate of 4.4%

• Excess supply • Further damage caused by recession • Global economic growth rate of 2.8% or lower

5

Turning point 5

Business Portfolio: Current Status (December) *Today’s topics

Next-generation Growth Businesses

Existing Growth Businesses

e.g. Pharmaceuticals Food Ingredients White LED* Recording media Li-ion battery materials for HEVs* Chemical components for automobiles Performance polymers Sustainable resources High performance graphite* Next-generation displays Organic photovoltaic modules Personalized medicine

High performance polyester films Electronic device components C4 chemicals* Polypropylene Polycarbonate and bisphenol-A*

Businesses to be Restructured Stable Businesses e.g.

Blast furnace coke*

Terephthalic acid* Olefins and aromatics* 6

6

Business Environment of Petrochemicals Recognition on upcoming business environment „ Global economic growth rate is 2.8%/yr or lower (Further oversupply of price competitive Middle Eastern products) „ A sharp demand drop in automobile and IT industries

2010 - 2011 Global ethylene operation rate of 80% Recognition on upcoming impact on Asian suppliers „ C2 derivatives: Operation rate 50 - 60% •Commodity products are dominated by middle eastern products

„ C3 derivatives: Operation rate 80 - 85% •Compete by delivering high value-added products

„ C4 derivatives: High value- added products are practically competitive

Can compete in C3/C4 derivatives market Tough to compete in C2 derivatives market 7

7

Global Ethylene Supply/Demand Balance APTSIS 10

Million ton

百万トン200

95

能  力 Capacity

Ethylene operation rate expected w/ global expected growth rate of 4.4%

百万トン

180

需  要 Demand 稼働率

Operation rate

160

90

89

140 120

95 % %

85

100

Ethylene operation rate expected w/global economical growth rate of 2.8%

85

83 82

80

80

60

80

Assumed operation rate based on current economical downturn

40 20

75

0 1999 8

2002

2005

2008

2011

実績

見通

Source: Demand forecast by METI (as of May 28, 2008) & Internal forecast

8

Measures for C2 Derivatives Accelerate the following items during APTSIS 10 „ Withdraw weak C2 businesses ¾ Raising profitability approx. by 10 billion yen

„ Strengthen the foundation of polyethylene business ¾ Consolidating production facilities & shifting to higher value-added products

„ Optimize & reduce utility facilities ¾ Reducing number of boilers & improving fuel conversion ( improve approx. 10 billion yen) ¾ Sharing utilities in petrochemical complexes through partnership & cooperation

„ Asset lean ¾ FY2010 target is approx. 200 billion yen reduction • Reduce inventories • Reduce common facilities, etc. • Transfer shares • Business withdrawals : ABS, α-olefin, etc. 9

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Timeline on Restructuring of Petrochemical Complexes FY2008 Linear alkylbenzene Acrylonitrile Melamine Acrylic acid, acrylic ester Polystyrene Compounds, polyethylene Polyvinyl chloride Styrene monomer

FY2009

FY2011

FY2012

Mar. 2006: Production facility shutdown (surfactant) Apr. 2006: Decrease share in Dia-Nitrix Co., Ltd. (50% to 35%) Mar. 2007: Production facility shutdown Sep. 2007: JV dissolution with Sasol Chemical Industries Limited (South Africa) Mar. 2008: Dissolution decision on HMT Polystyrene Co., Ltd. (Thailand) Apr. 2008: Merger with Advanced Plastics Compounds Company in compounds business; Make Japan Polyethylene Corporation to a consolidated subsidiary of MCC May 2008: PVC production facility shutdown: V-TEC Corporation’s Mizushima Plant Jul. 2008: Dissolution decision of Yuka Seraya Private Limited



AO/HA (α-olefin)

FY2010



Dealing w/ customers and preparation for shutdown

■Shutdown decision ■Shutdown

■ ■

Ethoxylate

Dealing w/ customers and preparation for shutdown

ABS (Techno Polymer Co., Ltd.) Other C2 derivatives PTA

■ Sale of shares

Shutdown studies and decision making; preparation for shutdown

Restructuring of petrochemical complex & Partnership

Restructuring of each petrochemical complex by partnership

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Building Competitive Business Structure Business expansion with competitive derivatives Domestic Build competitive olefin aroma center High performance PP & PE EO, and BPA

Kashima Complex

Specialize in competitive derivatives High performance PP & PE, Oxo products

Mizushima Complex

Overseas Specialize in high valueadded products for automobiles and others

Specialize in comparatively advantageous businesses

Compounds, films, 1,4-BG, PET, and PBT

PC, C4 chemicals PP & PP compounds

Yokkaichi Plant

Study possibilities of consolidating production facilities to rebuild petrochemical complexes through partnership, etc.

Partnering with the most promising regionally-based company

Partnership (Oil refineries, Petrochemicals)

Accelerate R&D to diversify feedstock from naphtha e.g. 1. Coke oven gas 2. Butene 11 3. C2

Propylene (C1 chemical) Butadiene 1-Hexene 11

Business Topics „ Existing growth businesses „ C4 Chemicals „ Polycarbonate and bisphenol-A „ Business to be restructured „ Terephthalic Acid

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Existing Growth Business

C4 Chemicals

(1,4-BG, PTMG)

Increase market exposure in expanding Asian market „ Complete No.1 PTMG plant in China as planned (3Q, FY2008) „ Establish a new ‘butene to butadiene’ process to secure butadiene (Operation confirmed by 200t/yr pilot plant) „ Supply raw materials for green sustainable plastic, GS Pla* * Copolyester derived from succinic acid and 1,4-BG Creating new butadiene source (butene to butadiene) ** *

1,4-BG market and our share



Expanding market share in Asia

300

Strength : Raise production yield of butadiene from naphtha cracker and establish a new butadiene production technology from FCC raw materials Features : Established a practical continuous process, a one-step production of butadiene by dehydrogenation of butene, using proprietary catalyst.

250

8% annual growth rate

200 150

30% share

Naphtha Cracker

100

Asia Market

2027

2025

2026

2024

2023

2022

2021

2020

2018

2019

2017

2016

2015

2014

2013

2012

2011

2010

2009

0

2008

50

2007

million ton/y

350

Butadiene extraction process Isobutylene extraction

Oil Refinery FCC

Butadiene fuel

New Process Butene

fuel

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Existing Growth Business

Polycarbonate and Bisphenol-A Targeting high performance market segment in China „ Combine SINOPEC and Mitsubishi Engineering-Plastics Corporation’s sales channel & our R&D to increase market presence in China. „ Supply DPC(raw material, diphenyl carbonate)to China from No. 2 polycarbonate production facility (KP2) at the Kurosaki Plant in conjunction with China PJ.

2,500

China China PC market growth forecast PC market growth forceast 15%

2,000

KT/Y

1,500

Optical Extrusion Medical Automotive E/E・OA Miscellaneous PC/ABS Bottle Growth Rate

120% yr on yr

14%

Mid to long term of 8% growth rate Initial forecasted growth rate

7%

115% 110% 105% 100%

dd

1,000

China

KP2 Start: April 2010

China PJ Start : Q2, 2010

KP1

ChinaPJ PJ 中国

溶融法PC

Beijing Yanhua 燕山石化

Melt Process PC20KT 20KT

90% 85%

50KT

500

High Performance 0

80%

2005 2006 2007 2008

China Market Asian share 20%or more

2009 2010 2011 2012 2013 2014 2015

’08 MEP 14 5% Share

PHL / ACT UTT

KP2 Melt Process 溶融法PC PC 60KT 60KT

95%

Generic Commodity

Kurosaki

DPC 100KT

BPA 150KT Supplying Raw material BPA DPC

50KT

Outer 外販 sales

PHL

Melt Process 溶融法PC PC 60KT 60KT

Outer 外販 sales

MEP Share 10% 14

Business to be Restructured

Terephthalic Acid Thorough cost reduction and alliances „ Regional strategy India, Indonesia, and China: Alliance with regionally-based company to leverage sales and production

„ Cost competitiveness ¾ Secure profit with 150$/t spread • •

Streamlining, etc. Variable cost reduction

4.5 billion yen (FY2008) 3.0 billion yen (Investment 4 billion yen; within 2yrs recovery period)

¾ Unprofitable production facilities are under review

„ Management by overseas global head quarters (GHQ) ¾ Manage procurement, sales, and technology ¾ Streamline organization by human resource localization Mitsubishi Chemical

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GHQ Business HQ / Technology HQ

NMC

MCCI

MCPI

(China)

(Indonesia)

(India)

MCC

SNC

(Japan)

(Korea)

Matsuyama

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CAPEX and Investment & Loan APTSIS 10 resource allocation revised „ CAPEX and investment & loan ¾ Reduction by prioritization 590 billion yen 430 billion yen (-160 billion yen) Performance Products Health Care Chemicals Others

210 billion yen 75 155 150

150 billion yen 75 100* * ca.70 billion for petrochemical’s 105 safety measures and rationalization

„ Strategic investment & loan ¾ 250 billion yen (guide line) + α

„ R&D expenses ¾ Prioritize 425 billion yen

405 billion yen (-20 billion yen)

White LED and Li-ion battery materials will be top priority among the seven next-generation growth business 16

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Seven Next-generation Growth Business Prioritize in white LED and Li-ion battery material for HEVs

White LED

Chemical Components for Automobiles

Li-ion Battery Materials for HEVs

Next-generation Displays

Sustainable Resources

Personalized Medicine

Organic Photovoltaic Modules

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White LED Project LCD backlight

White LED

White LED White LED

Next-generation DVD LED technology Chip technology

Automotive light source

Phosphor technology

1um

Next-generation transistors

Short wavelength laser diodes

Lamp

Gallium nitride (GaN) substrate

Semiconductor materials technology

Total market size in 2010: 1 trillion yen 18

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Business Expansion Flow Materials Parts

Components

GaN Substrate Business

Final Market

Market Size (2015)

Automotive transistor

1 trill. yen

Insulated-gate bipolar transistor (IGBT)

GaN Substrate

Blue & green laser diode

Sale

Self-manufacture

White LED manufacture Device Business White LED Lamp

Chip

White LED

Lighting equipment

2 trill. yen

Back light for LCD Phosphor Business

Phosphors

White LED manufacture

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Material Business

Update on GaN Substrate Vapor deposition method 2” c-plane

Full-scale sales

(production stage) ‹ Achieve high output

‹ Surpassing competitor’s

2nd to launch in the market

surface quality

m-plane

World’s 1st to successfully develop nonpolar & semipolar crystal plane

(development stage) m-plane(12 x 20mm)

‹ More efficient than current products

• Mass Production (2009)

‹ Possible to be used for green laser

• Replacing c-plane, aim to lead the market (target 2015)

‹ Collaboration with UCSB (Prof. S. Nakamura’s team) <hold wide range of patents> 20

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Material Business

Update on GaN Substrate Liquid phase growth method Developing an ultra low cost manufacturing technology „ Progress ‹ Joint development w/ Prof. S. Nakamura’s team (Ammono-Thermal) ‹ MCC’s proprietary production process (Chemical equilibrium method: G-CHEM) ⇒ Currently at a small size crystal formation stage, similar luminescence to vapor deposition method „ Features and Purpose ‹ Bulk production ⇒ Ultra low cost ‹ Large diameter ⇒ Driver to expand the next-generation transistor market (e.g. automotive transistor: IGBT) Si→ SiC (silicon carbide) →GaN

Target to lead the market by 2015 through supplying m-plane substrate (ultra high performance), using liquid phase growth method (ultra low cost) 21

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Material Business

Update on Phosphors Exceeding original sales plan

„ Activated the market Adopted for LED lighting

Substitute incandescent light bulbs (energy conservation, CO2 reduction)

Adopted for LED backlights

Key LED materials for LCD backlights

„ Progress ‹ Dominant world wide share in RED; expanding sales in GREEN ‹ Merge Kasei Optonix, Ltd. with Mitsubishi Chemical to integrate sales, production and R&D (April 2009) 22

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Business Scope From materials to Chip/LED components business

Net sales Billions of yen

Mar. 2008 Acquired patent for near-UV (nUV) white LED Chip & production facilities from Mitsubishi Cable Industries, Ltd. Aug. 2008 Started production & Sales of Chip (for lighting purpose)

2010 -

Utilize cutting edge materials to create and lead nUV LED market

Chip/LED 100 Materials

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2010

2015 23

MCHC Group Carbon Business

Masanori Karatsu Executive Officer Chief Operation Officer, Carbon Division Mitsubishi Chemical Corporation

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Agenda „ Carbon Business - History and its Product Chain „ Business Performance „ Carbon Production Base „ Basis and Key Business „ Blast Furnace Coke „ Existing Growth Business „ High Performance Graphite „ Fusion of Carbon Chemistry and Petrochemicals „ Carbon Oven Gas 25

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Carbon Business and Product Chain Carbon allotrope: diamond and fullerene

Raw Materials

Coal

1938 Start up at the Kurosaki Plant - Basis Business for 70 years

9,300KT Products

Coke Oven

Blast Furnace Coke

Plants

Usage

Sakaide Kakogawa

Steel

Sakaide Kakogawa

Power generator

Sakaide

High performance graphite, Electrode, Atomic energy, Semiconductor

Sakaide

Robot arm, Construction

Kurosaki Yokkaichi

Tire/ink

6,400KT Carbonization Coke Oven Gas, COG 1300MNm3

Coal Tar

Pitch

Needle Coke*

300KT Liquefaction & carbonization

Carbon Fiber* 1,000T

Carbon Black

Creosote Oil 100KT

Vaporization & Carbonization

200KT

* Existing growth business in APTSIS 10

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Locations – Carbon Products Business Steel Works Mitsubishi Chemical Coke Plants

Kansai Coke and Chemicals Co., Ltd. (Kakogawa, Amagasaki) JV with Kobe Steel, Ltd. since 1956 Nihon Kasei Chemical Co., Ltd. (Onahama) since 1959

Kurosaki since 1938

Carbon black

Carbon black

Head Office

Steel Works in Setonaikai Area: Oita, Yahata, Tobata, Kokura, Kure, Fukuyama, Kurashiki, Hirohata, Kakogawa, Kobe, Sakai, Wakayama

Yokkaichi

Sakaide since 1969

Carbon black, Synthetic rubber

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Business Performance (2002 - 2008) Rapid growth in China from 2003 ¾ The domestic production of crude steel has expanded

Operating profits and coking coal price 1980 - 2008 250

to 120 million tons ¾ Coal & iron ore markets became tight, leading to price hike

600

Operating Profits 200

500

150

Sales

400

?

100 300

50

Crude Steel Production

200

19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08

0 -50

100

Coking Coal Price

-100

Coking Coal Price

0

Operating Profits 1997

2002

2003

2004

2005

2006

2007

2008

2010

28

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Carbon Production Base, Sakaide Plant Carbon Fibers

Needle Coke

‘Carbon Production Base’ Since 1969

Sakaide Plant

Coking Coal from Australia

Tar Blast Furnace Coke

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World Crude Steel Production Million ton

600 500

Rapid expansion of Chinese crude steel production now large production reduction 490

540 480

420

400

350 270

300 220

200 100 0

'0 3 2003

2004

Japan

'0 5 2005

US

2006

'0 7 2007

Europe

'0 8 /2008 1 0 月時点見込 2008 forecast forecast

China

as of Dec.,08

30

30

Monthly Chinese Coke Export (2003 – 2008) Thousand ton

Amount

$/ton

Price

700

2,500 MCC Contract FOB Coke Price for CY2008

600 2,000 500 1,500

400 300

1,000

200 500 100 0 Ju l-0 8 Ja n09

Ju l-0 6 Ja n07 Ju l-0 7 Ja n08

Ju l-0 4 Ja n05 Ju l-0 5 Ja n06

Ja n03 Ju l-0 3 Ja n04

0

Source: Statistics of Chinese Custom 31

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APTSIS 10 Carbon Business Strategy „ R&D ‘clean energy’, H2: 60%

Basis & key business: Blast furnace coke

Coal

Coke oven

COG

R&D-1: COG COG

benzene DME

methanol propylene

R&D-2: C1 chemistry, utilize CO2 H2, C, and heat used for deoxidization „ Existing growth business:

High performance graphite

Tar

Global shortage of needle coke: Electrode for steel production & specialty application Rapid growth of carbon fiber demand R&D-3:

Dry distillation

9 Improve pitch purification efficiency 9 Capacity increase by 25%

Coke

Competitiveness depends on tar and COG.

„ Blast furnace coke: Recent high growth caused by strong Chinese demand lead price hike of coking coal and coke. Steel production, however, are slowing down. 6.4 million ton

Domestic customers: Nippon Steel, Sumitomo Metals, Kobe Steel, and Nisshin Steel (for competitive high grade steel) Export: US, EU, and Brazil 32

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Existing Growth Business

High Performance Graphite Distillation

Purification

Coal tar

Spinningcarbonizing

Coal tar pitch

Delayed Coking Calcinations

Carbon fiber

Compound materials

Needle pitch coke Applications

„ Graphite electrode for electric arc furnace steel making ¾ Competitive steel products, depending on prices of scrap & electricity ¾ Increasing demand

„ Various electrode and electric brush ¾ Advancement of electrical application

„ Semi-conductor application ¾ Increasing demand on crucibles for silicon pulling furnace

„ Atomic power core material, pantograph slider and sealing material 33

33

Existing Growth Business

Needle Coke Applications Needle Coke

Artificial graphite features heat, acid, and chemical resistant, electrical conductivity thermal conductivity, and lubrication

„ Graphite electrode for electric arc furnace steel making 9 Competitive steel products (depending on prices of scrap & electricity)

9 Increasing demand

„ Various electrode and electric brush 9 Advancement of electrical application

„ Semi-conductor application 9 increasing demand on crucibles for silicon pulling furnace

„ Atomic power core material, pantograph slider, and sealing material

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High Performance Graphite - Capacity Increase APTSIS 10 Capex: 4 billion yen Coal Tar Distillation

Pitch

300kt/y 360kt/y

260kt/y 320kt/y

To be completed in Aug. 2010 Delayed Coking

260kt/y 320kt/y

Calcinations

130kt/y 150kt/y

„ Needle coke for graphite electrode +15,000t/y; share +10% „ Pitch base coke for special carbon products for semiconductor applications and atomic power core material + 6,000t/y; share + 10% „ Pitch base carbon fiber +10,000t/y; increase carbon fiber capacity to 1,300t/y 35

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Fusion of Carbon Chemistry and Petrochemicals Carbon Chemistry

Coke Oven Gas H2 CH4 CO N2 CmHn

58% 28% 7% 2% 4%

Petrochemicals Clean Energy

H2 Methane to benzene

CH4

C6H6 Benzene 300KT

CO

Methanol

1,300MNm3

Dimethyl Ether

H2 C

Propylene 300KT

CO2 36

36

Add Value to Coke Oven Gas

Sakaide Plant Coke Oven Gas

Methanol

Mizushima Plant DME

Propylene

Accelerate establishment of manufacturing process Confirmation by pilot plant

CO2 reduction by 220,000 ton

Decrease by 135,000 ton vs. naphtha cracker

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Coke Oven Hot-renewal Start up from 2008 Renewing bricks of No.6 flu edge

■Parts: Renewing bricks

3Q

1G

1A

3C

2G 2C

from ‘08: 5.8 billion yen/28 ovens from ‘11: 2.0 billion yen/16 ovens from ‘12: 2.5 billion yen/22 ovens

1B

1P

2P

1P

2P

2A

3C

Renewing backstay & protective hardware

5C 38

2G 6Q

2B

3P

3A

6C 3G

3B

5G 5Q

3C 38

APTSIS 10 Carbon Business Summary „ Plant measures ¾Coke oven hot-renewal to ensure reliability „ Environment measures ¾ Desulphurization ¾ Dust catcher ¾ Prevention of marine pollution „ Demand expansion ¾Further expansion in exportation of needle cokes for special steel „ Add value for COG ¾ Completion of technological development of COG to propylene „ High Performance Graphite ¾ Capacity increase by 25% „ Energy Efficiency ¾ Streamline and improvement ¾ CO2 reduction 39

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MCHC Group Li-ion Battery Materials Business Shigeru Tsuyuki Managing Executive Officer Chief Operation Officer, Performance Products Division Mitsubishi Chemical Corporation

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Agenda

„ What is Li-ion Battery? „ Li-ion Battery Market „ Li-ion Battery Materials Market „ MCC’s Battery Materials Business Activity „ MCC’s Battery Materials Strategy

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What is Li-ion Battery? Working Principals

Li-ion transfers from Cathode to Anode when the battery is charged.

Li-ion transfers from Anode to Cathode when the battery is discharged.

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What is Li-ion Battery? Structure 18650 Cylindrical electrode

18650 Cylindrical cells

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What is Li-ion Battery? Applications For ForHigh HighCapacity Capacity

For ForHigh HighPower Power

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Li-ion Battery Market Domestic sales (Yen/Cell) (Mil. Cells)

No. of cells

Amount

Ave. Price

(Billions of yen)

450.0

1500 1250

300.0

1000 750

150.0

500 250

0.0

0 1995 1997 Data source: METI

1999 2001

2003

2005 2007

45

45

Li-ion Battery Market (Thousand units)

Estimated market for LiB HEV/EVs

8,000 7,000

Will LiB-HEV/EV boom beyond 2015?

6,000 5,000 4,000 3,000 2,000

Start up

1,000

Popularization

0 2008

2010

2012

2014

2016

2018

2020

46

2008 MCC Estimation

46

Li-ion Battery Materials Market

Market size of four battery materials

Consumer HEV MCC (share)

2007 200.0 - 10.0 (5%)

2010 250.0 5.0 17.0 (6%)

2015 300.0 100.0 50.0 (12.5%)

2020 310.0 650.0

(Billions of yen)

1,200.0

LiB material market may expand double by 2015 and 5x by 2020

1,000.0 800.0

APTSIS 10

600.0 400.0 200.0 0.0 1991 '93

'95

'97

'99

'01

'03

'05

'07

'09

'11

'13

'15

'17

'19

47

2008 MCC Estimation

47

MCC’s Battery Materials Business Activity Our Products Place of Production

Market Share

Li salt (LiPF6) Electrolyte Solvents (EC, DMC) Business Additives

Yokkaichi, Suzhou

20-25%

Anode

Amorphous carbon Natural/Artificial Graphite

Business

Sakaide

10-15%

Cathode

Li compound made up of Ni, Mn, Co

Business

Sakaide, Mizushima

<5%

Separator

Micro porous film made of polyolefin

Development

Nagahama

-

Product

Phase

48

48

MCC’s Battery Materials Business Activity

Electrolyte High-performance additives based on; ・Molecular design ・Organic synthesis ・Battery evaluation technologies

Anode Customizing the material by controlling; ・Amount of coating material ・Particle size ・Particle form ・Specific surface area, etc.

Cathode ・Ni, Mn rich type ・Pore structure in the secondary particle is designed to improve Liion diffusion, enabling high power.

Separator Solvent-free three-dimensional micro porous structure having; ・High power at low temperature ・Cyclic life ・High temperature storage

49

49

MCC’s Battery Materials Business Activity e.g. Separator Sales: MCC

Multiple sales channel Production: MPI

Micro porous film design Mass production

Evaluation: MCRC

Product design Battery testing

Synergy of product development in MCHC Group 50

50

MCC’s Battery Materials Business Activity Capital Expenditures Planned (2008-2010)

Estimated Amount

Launch

Electrolyte

0.2 Bil.

Jan. 2010

2,500 MT/Y

Anode

1.0 Bil.

Oct. 2009

2,000 MT/Y

Cathode

2.0 Bil.

Oct. 2009

600 MT/Y

Separator

1.0 Bil.

Jul. 2009

12 mil. m2/Y

Capacity

Electrolyte and Anode capacity increase includes de-bottling of current lines.

51

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MCC’s Battery Materials Business Activity

Battery Evaluation & Safety Analysis

Dynamic behavior of •Heat generation Simulation •Temperature •Heat transfer etc.

•Thermal properties Analysis •Calorimetry •Electrical resistance •Output power etc.

Testing

•Short circuit •Overcharging •Heating etc.

Safety engineering for innovation of new materials 52

52

MCC’s Battery Materials Business Activity

R&D Activities One of the top applicants of LiB related patents and original papers GS Yuasa G ジーエスユアサ G

Panasonic G G 松下電器産業

Panasonic G 松下電器産業 G

GS Yuasa G G ジーエスユアサ

Sanyo G 三洋電機 G

Hitachi G G 日立製作所

Sony G ソニー G

Saft GG SAFT

Hitachi G 日立製作所 G

Sanyo GG 三洋電機

Toshiba 東芝 G G

Samsung G G SUMSUNG

MCC G 三菱化学 G

Sony GG ソニー

トヨタ自動車 G Toyota G

Toshiba GG 東芝

SUMSUNG G Samsung G

MCC G G 三菱化学

NEC NEC G G

NEC GG NEC

Nissan G 日産自動車 G

トヨタ自動車 Toyota G G

Ube G 宇部興産 G

EVEREADY Eveready G G

Asahi 旭化成 Chem G G

大阪ガス Osaka Gas G G

0

500

1,000

1,500

2,000

2,500

Number of open-laid patents applied (Japan) PATOLIS DB (1971 - 2007/4/30) “IC = H01M10/40” 18,692 applications (67% covered by Top 13)

0

20

40

60

80

100

120

140

Number of original paper CA PLus DB (1907 - 2007/5/18) “Li + lithium” x “battery + cell + electrode + electrolyte” x “journal + letter” 55,730 papers (1.7% covered by Top 13)

53

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MCC’s Battery Materials Business Activity

Our Business Model

Material development (Present) Focused on optimizing each material’s performance

Material development (Future) In addition, optimizing the combination of materials

By having four key materials in-house, we offer total solution for high performance battery. 54

54

MCC’s Battery Materials Business Activity

Our Business Model

Material development and manufacturing Anode Evaluation of model cells

Cathode

Electrolyte

Analysis

Separator Safety analysis

Battery Battery Manufacturers Manufacturers 55

55

MCC’s Battery Materials Strategy

MCC will become a total solution provider of LiB materials such as *Electrolyte *Anode *Cathode *Separator With supporting technology and know-how of *Battery evaluation *Battery analysis

Target sales and operating income in 2015 Net Sales JPY50.0 Billion, ROS 10%

56

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