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As of August 14, 2009, Shin-Etsu Chemical Co., Ltd. (Head Office: Tokyo, President Chihiro Kanagawa) has completed the procedures required to make its affiliate CIRES, S.A. (Head Office: Portugal; President: Ricardo Manuel Simões Bayão Horta), a company manufacturing and selling PVC in Europe, a wholly-owned Shin-Etsu subsidiary.

Shin-Etsu originally announced its plan to make CIRES, S.A. a wholly-owned Shin-Etsu subsidiary on December 10, 2008. Shin-Etsu has been moving forward in completing the necessary procedures through Shin-Etsu International Europe B.V. (SEIE), a Shin-Etsu Group business base in Europe. We have taken the following steps:

1. Shin-Etsu negotiated and signed a contract to obtain all the CIRES shares owned by the INEOS Chlor Vinyls Holdings B.V., then one of the main CIRES shareholders.
2. After obtaining the above-mentioned shares, SEIE executed a takeover bid for the all the remaining shares of CIRES (about 47%). The remaining shareholders, including the Mitsui Group (with over 26. 07% of the shares), and Portuguese local companies, have accepted the takeover bid.

Thus, the takeover bid has been completed and CIRES has become a 100%-owned Shin-Etsu subsidiary. As a result, CIRES together with Shin-Etsu PVC in The Netherlands, will further strengthen Shin-Etsu’s PVC business in Europe. In the future, as a member of the Shin-Etsu Group, CIRES will strive to strengthen its profitability by endeavoring to improve its manufacturing technologies and enhance its sales power.

CIRES was established in 1960 in Estarreja, Portugal through a joint venture among Portuguese local companies, Shin-Etsu Chemical and Mitsui & Co. After starting its operation with an annual production of about 3,000 tons, CIRES implemented repeated expansions, and at present, its production capacity has expanded to about 200,000 tons annually.

The Shin-Etsu Group’s PVC business has the world’s No. 1 production capacity of 3.5 million tons annually, and with its tri-polar PVC production system, consisting of Shintech Inc. in the U.S. at its core together with its production facilities in Europe and Japan, Shin-Etsu has been providing stable supplies to its worldwide customers. In addition, the future demand for PVC in Europe is expected to show strong growth in such application fields as window frames, which as an energy-saving measure are effective in improving the heat-insulating properties of housing.