Shin-Etsu Chemical Co., Ltd. (President: Chihiro Kanagawa; Head Office: Tokyo) has decided to construct a rare earth separation and refinement plant in TechnoPort Fukui, (Fukui Prefecture, Sakai City, Mikuni-cho).

Since 1965 Shin-Etsu Chemical has been carrying out integrated production of rare earth and rare earth magnets -- for which rare earth is the basic raw material -- at its Takefu Plant located in Echizen City of Fukui Prefecture. In recent years, neodymium magnets, which are the mainstream type of rare earth magnets, have seen burgeoning demand in product applications for energy-saving air-conditioner compressor motors and for motors for hybrid cars. Shin-Etsu is meeting growing demand by means of production expansion.

However, at the Takefu Plant, there is not much more room for the expansion of production facilities. After careful consideration in seeking a new site location in Fukui Prefecture where a succession of production expansions would be possible, the decision was made to build a rare earth separation and refinement plant in TechnoPort Fukui, where the appropriate industrial infrastructure is in place and the location is close enough so that the operation can be well coordinated with the production activities at the company’s Takefu Plant.

1. Acquisition site:
　Land of Fukui Prefecture　　　　 　　　　48,386m²
　Land of Chiyoda Ute Co., Ltd.* 　 　　14,106 m² *
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　Total 　　　　　　　　　　　　　　　　　　　　62,492 m²
　 *Transfer of property from Chiyoda Ute Co., Ltd. is scheduled shortly.

2.Details of Investment
(1) Facilities
The rare earth separation and refinement facility, which is the raw material for rare earth magnets, and other secondary facilities such as a wastewater treatment facility.
     •  Production capacity: 1,000 tons/year of rare earth oxide
     •  Building:                    Total Space of 1,500 m²

(2)Investment amount
    Land (62,492m²)                                     1 billion yen
    Building, Machinery, Equipment, etc.    1 billion yen
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    Total                                                        2 billion yen

(3)Construction schedule
    August 2007 – February 2008 (tentative plan)

(4) Number of employees
    About 40

3. Future plans
For the unused land area, we are envisioning additional expansions of rare earth separation and refinement facilities, similar to the one we now about to build, and also construction of downstream facilities, such as for magnet manufacturing processes. However, decisions about all of these expansion plans will be greatly influenced by future economic and market trends. At this time, we have no concrete plans formulated about the amounts to be invested or scheduled dates for construction.