On December 27, 2006, Tokai Carbon acquired equity of 80% in Carbon Industrie-Produkte GmbH and Carbon Mechanik GmbH ("CIP Group"). CIP Group became a Tokai Carbon subsidiary. Tokai Carbon announces the following with regard to that decision.

1. Objective of the acquisition of CIP Group

Tokai Carbon has decided to acquire equity in CIP Group, which sells and machines isotropic graphite, extruded graphite, molded graphite and carbon-carbon composite. Tokai Carbon exports these graphite products and carbon products to Europe and sells them through existing European subsidiaries. This acquisition lifts Tokai to a high position in Europe for Specialty Graphite, and allows Tokai to achieve a strong foothold in the largest market in Europe, and to give better and more comprehensive services to our customers. Tokai Carbon Fine Carbon Division has already 8 subsidiaries, affiliates and offices - 3 in Europe, 2 in USA and 3 in Asia, CIP Group becomes the 9th member of global network and contributes to world wide business strategy of Tokai Carbon.

2. Overview of CIP Group

Name of Corporations	Carbon Industrie-Produkte GmbH	Carbon Mechanik GmbH
Representatives	Mr. Hans Josef Hackl	Mr. Hans Josef Hackl
Location of Head Office	Industriepark 25a, Buchholz-Mendt, Germany	Industriepark 25a, Buchholz-Mendt, Germany
Main Business	Sales of isotropic graphite, extruded graphite, molded graphite and carbon-carbon composite	Machining of isotropic graphite, extruded graphite, molded graphite and carbon-carbon composite
Settlement of Accounts	December 31	December 31
Capitalization	25,564.59 euros	25,564.59 euros
Performance in recent Fiscal Years:	Year ending Dec-05 Consolidated Sales 6,492,000 euros

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