Tokai Carbon Co., Ltd. (President: OHTAKE Shikio, referred to as Tokai Carbon hereafter) and Sumitomo Corporation (President & CEO: OKA Motoyuki, referred to as Sumitomo Corporation hereafter) decided to jointly establish a local subsidiary in the City of Tianjin in China to construct a carbon black manufacturing plant. The move to China will be the first ever made by a Japanese carbon black business.

Name of the Company : Tokai Carbon (Tianjin) Company Ltd. (planned), referred to as Tokai Carbon Tianjin hereafter Capital : Approx. 2 billion yen (total investment: approx. US$50 million) Ownership : Tokai Carbon: 80%, Sumitomo Corporation 20% (planned) Inauguration : March, 2004(planned) Plant Completion : Spring 2006(planned) Location : Chemical Industry Park, Tianjin Economic and Technological Development Area (area: 150,000 m2) Production Capacity : Phase I : 40,000 tons per year (expansion planned up to 100,000 tons per year depending on demand)

Background : Demand for carbon black in China is expanding at more than 10% due to the rapid development of the automobile industry, and in 2001 it has already exceeded that in Japan. This trend is expected to continue. High logistics and distribution costs of carbon black make it desirable for manufactures to have a production base close to a market where products are consumed. To add an easy access to raw materials is available in China. Therefore a manufacturing base in China meets all requirements for operating overseas.

Tokai Carbon Tianjin is scheduled to supply high-quality carbon black mainly to Japanese and Euro-American tire manufacturers and Japanese automotive rubber component manufacturers, under a service structure equivalent to that in Japan. Furthermore, the firm envisions entering into non-rubber markets such as those of high value-added products requiring colorants such as inks depending on the local situation.