Shin-Etsu Chemical Co., Ltd. (Head Office: Tokyo; President and CEO: Chihiro Kanagawa) announced that it will construct two new manufacturing facilities to speed up the growth and development of its global silicones business, which is one of the main business pillars of the company. Shin-Etsu plans to construct a new manufacturing facility for production of specialty silanes in Freeport, Texas in the American Southwest, and a new silicone polymer manufacturing facility in Rayong, Thailand.

Shin-Etsu will invest about \6 billion for the new specialty silanes facility in the U.S. and about \7 billion for the silicone polymer facility in Thailand. When Shin-Etsu's investment of about \15 billion in the previously announced (Feb. 2001) Shin-Etsu/General Electric/Toshiba joint-venture to manufacture silicone monomer in Thailand (Asia Silicones Monomer Limited) is added in, Shin-Etsu's total new investment in 2001 to further strengthen its global silicones business comes to about \28 billion.

Specialty silanes is just one of the products handled by Shin-Etsu Chemical's Silicone Division. They are used in diverse application areas such as tires, rubber and electronics parts in addition to being used as adhesives, coating gents and glass fibers. Sales in this product area are showing steady growth every year. Specialty silanes are also used as thermoplastics and adhesive promoters as well as cross linkers. They are contributing greatly to improve the functions of finished products. Particularly in recent years, sales of high fuel efficiency silica-compounded tires are greatly increasing due to silica being combined in the tires' filler, which lowers wheel-rolling resistance, resulting in improved fuel efficiency. Accordingly, this modifier product, which uses a specialty silane (polysulfide silane), is contributing to help society cope with some environmental issues involving the automobile.

Doubling Shin-Etsu's production capacity

With its investment in a new specialty silanes facility in the U.S., Shin-Etsu Chemical plans to take a giant leap forward in expanding its world market share in specialty silanes.

Until now, Shin-Etsu Chemical has produced specialty silanes at its Naoetsu Plant (in Niigata Prefecture) to supply the worldwide market. As the Naoetsu Plant reaches its peak capacity, the new plant will satisfy the increase in worldwide demand. Furthermore, the company wants to expand its global market share in specialty silanes. Therefore, Shin-Etsu decided to select a new global production site in a world business region where demand is expected to continue to grow rapidly in the coming years.

The new manufacturing facility in the U.S. will be constructed on land of about 1,650,000 square meters that Shin-Etsu Chemical owns adjacent to the Freeport, Texas site of Shintech, Inc., a Shin-Etsu U.S. Group company, which manufactures and sells PVC (polyvinyl chloride). The specialty silanes products manufactured at the new American facility will be supplied worldwide. The production capacity of the new plant will be about 10,000 tons per year. It will manufacture large-size products, mainly of polysulfide silane. When the new facility is completed, Shin-Etsu Chemical's total specialty silanes production capacity will be double that of its present capacity.

Construction and management of the new facility will be carried out by Shin-Etsu Chemical's U.S. Group company Shin-Etsu Silicones of America, Inc. (President: Nobuyuki Uesugi)*, and the name of the facility will be Shin-Etsu Silicones of America's Freeport Plant. The plant construction permit has already been applied for and is being assessed by the U.S. Environmental Protection Agency. As soon as the permit is obtained, construction will begin, and the company aims to complete construction by about August 2002. The number of employees is planned to be about 30.

Thai silicones plant to be constructed

In another important development in Shin-Etsu's global silicones business, Shin-Etsu Silicones (Thailand) Limited (President: Hajime Tomisato), a new 100% Shin-Etsu Chemical-owned Shin-Etsu Group company, was established in February 2001 in Thailand. This new company will handle the manufacturing and sales of silicones products. To meet the timing of the completion of Asia Silicones Monomer Limited's silicone monomer facilities, the joint venture among Shin-Etsu Chemical, General Electric and Toshiba in Thailand, the construction of the Shin-Etsu Silicones (Thailand) manufacturing facility will begin and be carried out with an estimated date of completion of about March 2003. The Thai Board of Investment's approval has already been obtained.

This new company will receive supplies of the raw material, silicone monomer, from Asia Silicones Monomer Limited and use it to produce silicone fluid and silicone elastomer products. Production capacity will be about 54,000 tons per year for both types of products combined.

The new facility is located in Asia Industrial Estate, Map Ta Phut, in Rayong, which is about 200 kilometers southeast of Bangkok. The site is next to the Asia Silicones Monomer Limited plant now under construction. The number of employees of Shin-Etsu Silicones (Thailand) Limited is expected to be about 110.

* Shin-Etsu Silicones of America, Inc was established in 1985. The company's headquarters and manufacturing facilities are located in Akron, Ohio, which is in the American Midwest. The company engages in the import, production and sales of various Shin-Etsu silicones products.