Shin-Etsu would like to again deeply apologize for causing great trouble and anxieties to the people concerned as a result of the occurrence of the Naoetsu Plant accident.

I. The status of the cellulose manufacturing facilities

Because of the occurrence of the accident on March 20th at the Naoetsu Plant, all cellulose manufacturing facilities were shut down. However, with regard to facilities other than the MC-II plant where the accident occurred, we have been preparing for the resumption of operations in accordance with the guidance of the governmental authorities pertaining to our company’s safety measures and also with the understanding of the local residents in the areas surrounding the Naoetsu Plant.
As a result, we are now able to resume operations sequentially starting with those facilities that have completed the construction work necessary to improve plant safety and have obtained the permission of the supervisory authorities to restart operations. Those facilities that resumed operations are those mentioned under [1].
(Please also refer to the web-site of Shin-Etsu Chemical’s Cellulose & Pharmaceutical Excipients Department for more detailed information: http://www.metolose.jp/e/

[1] Cellulose manufacturing facilities that will resume operation: (Please refer to the attached map.)

We will resume operations sequentially starting with the following manufacturing facilities:
· HP plant
· L-HPC plant
· MC-IV plant
The operation suspension order issued by the Governor of Niigata Prefecture (under the High Pressure Gas Safety Law No.39) and also the suspension order issued by the Joetsu Regional Fire Affairs Office (under the Fire Service Law No. 12-3) were rescinded on May 21, 2007.

[2] Status of the other cellulose manufacturing facilities

· The MC-II plant where the accident occurred: We are not yet able to estimate when the resumption of operations of this facility can begin.
· The MC-III plant: A part of the manufacturing facilities has completed safety measure construction work; however, we are still preparing for the resumption of operations by taking such steps as following the safety improvement preparation procedures stipulated by the governmental authorities.
· TC-5 (Pharmacoat) manufacturing facility: It is presently in the process of the relocation of equipment and safety measure construction work.

We will do our very best to achieve resumption of operations as early as possible so as not to cause any further inconvenience to our customers.

[3] The status of the investigation of the cause(s) of the accident

Investigations to determine the cause(s) of the explosion accident by the authorities are continuing; however, at this time, the cause(s) of the accident have not yet been determined.

II. The condition of the injured persons

Among the 17 persons injured in this accident and transferred to hospital, at present, four persons currently remain hospitalized and are receiving treatment. We pray for the speedy recovery of those who were injured, and we will endeavor to assure that they will continue to receive the best medical treatment possible.

We will continue to report further details on the situation as soon as more information related to the accident is ascertained.