Sumitomo Chemical Unveils New Three-Year Corporate Business Plan

03-06-2007: Sumitomo Chemical Company, Limited announced its new Three-Year Corporate Business Plan spanning the period from fiscal 2007 to 2009. The new Corporate Business Plan builds on the steady business expansion and profit growth achieved during the term of the current Corporate Business Plan and is modeled on its basic principles. While positioning the successful accomplishment of the Rabigh Project, with commercial operations to start in the latter half of 2008, as the most important objective to achieve, the new plan also incorporates measures designed to propel the Company through a quantum leap in its further business development.

The Rabigh Project shall radically strengthen the foundation of the Company's petrochemical business, and shall propel a quantum leap in the profitability of the business as well as significantly accelerating the globalization of the entire Sumitomo Chemical Group. At present, the most important objective is for the Company to concentrate its efforts on completing the Rabigh Project on schedule and bringing it into stable commercial operation as early as possible as well as establishing the necessary marketing structures.

In terms of globalization, the successful accomplishment of the Rabigh Project shall drive major advances in Sumitomo Chemical's business development. The Company will strengthen and enhance its corporate governance and management systems to support the further development of its businesses on the global stage.

By expanding its production capacities and implementing cost rationalizations, launching new products and shifting to higher value-added products, the Company plans to forge ahead to further strengthen its basis of profitability in the core businesses in all six of its business sectors.

The Company will continue to allocate its business resources in a focused and timely manner, seeking to boost profitability in areas like the life sciences and IT-related materials that are forecast to see sustained market growth.

Over the next three years, the Company plans to devote JPY 370 billion to capital investment. Meanwhile, the Company envisions a cash flow of JPY 530 generated from its business activities, and from this free cash flow, a maximum of JPY 200 billion will be set aside as a "growth reserve fund" to be used for investment opportunities with the potential to drive further growth that may arise. In its R&D activities as well, the Company will devote its efforts to the development, cultivation and early commercialization of new businesses.