October 8, 2008

SDK Establishes Rare Earth Metal Subsidiary in Vietnam

Tokyo, Oct 8, 2008 - (JCN Newswire) - Showa Denko K.K. (SDK) has established Showa Denko Rare-Earth Vietnam Co., Ltd. in Ha Nam Province, Vietnam, as its 90%-owned subsidiary. The new company will begin constructing a plant next month for the production of didymium and dysprosium metals. Didymium is a metal consisting primarily of neodymium and praseodymium, and is used as raw material for neodymium-based high-performance magnetic alloys. The plant will start producing 800 tons a year in total of didymium and dysprosium metals in April 2010.

In addition to current applications in automotive parts and electronics, neodymium-based high-performance magnets are expected to be increasingly used in wind power generation. Demand for dysprosium is also increasing, as addition of a small amount of dysprosium ensures high magnetic force of neodymium-based magnets at high temperatures. At present, dysprosium is produced mainly by refining ion-adsorption ore* that occurs in the southern part of China, centering on the Jiangxi Province. Thus, stable procurement of dysprosium and its recycling are critical issues for the electronics industry.

The new plant in Vietnam will produce didymium and dysprosium metals through a separation/refining process and an electrolytic process. The plant will use various raw materials procured inside and outside Vietnam, including rare earth concentrate and rare earth oxides. Annual sales of the new company are targeted at 2 billion JPY in 2010.

SDK is currently producing rare earth magnetic alloys at its plant in Chichibu, Japan, and at two subsidiaries in China (Baotou, Inner Mongolia and Ganzhou, Jiangxi Province), with combined production capacity of 8,000 tons a year. With the establishment of the new metal-producing company in Vietnam, SDK will further strengthen its rare earth operation as one of the company's strategic businesses.

For further information, contact:

IR & PR Office (Phone: 81-3-5470-3235)

*Ion-adsorption ore: An ore containing yttrium and europium (both used as fluorescent substance) as well as neodymium and dysprosium (for use in magnets). The ore occurs in the southern part of China, centering on the Jiangxi Province.


Profile of Showa Denko Rare-Earth Vietnam Co., Ltd.

Location: Dong Van II Industrial Zone, Ha Nam Province, Socialist Republic of Vietnam (Approx. 40 km south of Hanoi; along the national highway No. 1)

Capital: US$6.36 million (approx. 700 million JPY)

Establishment: October 1, 2008

Shareholders: Showa Denko K.K. (90%); Tokai Trade Co., Ltd. (10%)

Scope of business: Production and sale of didymium metal, dysprosium metal, and other rare earth products

Employees: Approx. 130

Chairman: Akira Ebinuma (General Manager, Rare Earth Division, Showa Denko K.K.)

President: Daiken Murakami (Rare Earth Division, Showa Denko K.K.)

Profile of Tokai Trade Co., Ltd.

Head office location: 16-13, Akasaka 2-chome, Minato-ku, Tokyo

Capital: 10 million

Establishment: April 2005

Scope of business: Trading

President: Moto Mitsui

Outline of Showa Denko's rare earth operations

Rare earth magnetic alloy production sites and annual production capacity

Chichibu Plant, Showa Denko K.K. (Japan): 5,000 tons

Baotou Showa Rare Earth Hi-tech New Material Co., Ltd. (China): 1,000 tons

Ganzhou Zhaori Rare Earth New Material Co., Ltd. (China): 2,000 tons

Total capacity: 8,000 tons a year

Rare earth metal production site and annual production capacity

Showa Denko Rare-Earth Vietnam Co., Ltd. (Vietnam): 800 tons

About Showa Denko

Showa Denko K.K. ('SDK'; TSE: 4004, US: SHWDF) is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. SDK makes petrochemicals (ethylene, propylene), aluminum products (ingots, rods), electronic equipment (hard disks for computers) and inorganic materials (ceramics, carbons). The company has overseas operations and a joint venture with Netherlands-based Montell and Nippon Petrochemicals to make and market polypropylenes. In March 2001, SDK merged with Showa Denko Aluminum Corporation to strengthen the high-value-added fabricated aluminum products operations, and is today developing next-generation optical communications-use wafers. For more information, please visit www.sdk.co.jp .


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