Kohei Morikawa, president and CEO of Showa Denko ("SDK"; TSE:4004) announced the following New Year message.

Let's Prepare for the Future

We expect that economic growth and recovery of domestic demand in 2018 will be as solid as those in 2017 and continue not only in developed countries but also in China and ASEAN region where the Showa Denko Group accelerates its business expansion. However, we should continue paying close attention to political and economic movements which were conducted in 2017 including introduction of stricter environmental regulation and decisions on policies to promote electric vehicles, since these movements significantly affect global economy. On the one hand, these changes in our business environment will bring the Showa Denko Group various business opportunities. On the other hand, we should recognize that these movements will make it necessary for us to change our business structure.

Let's Establish Individualized Businesses

Our efforts to maximize each business's profit in the existing business framework are now bearing fruit. In addition, favorable winds blew for us in 2017. Under these circumstances, concerning our goal of establishing individualized businesses, now we are confident that we can increase profitability to a certain level. However, we still seem only part way toward achieving certain scale of profit and stabilizing profitability. In order to change the Showa Denko Group into a group which constantly makes certain scale of profit even without favorable winds, we must make our businesses step up from their current positions. Should we increase sales of this business? Should we improve profitability of that business? Conceivable future scenario for stepping up varies from business to business. To make each of our businesses survive and win the fierce global competition, we must grasp in which segment we can survive and win, and continue establishing firm position in the relevant segment.

Let's Keep Searching for New Paths

Business environment changes at a dizzying pace. We must quickly know changes in wind direction and shift gears as quickly as possible. Our objective is clear. We aim to "satisfy all stakeholders" and show them the Showa Denko Group's "firm state at present" and "prospective future." We aim at one goal, establishment of individualized businesses. But there are various paths to the goal. Therefore, let's keep searching for new paths, be unafraid of changes, and take action aiming to have a giant leap as "a company that contribute toward creating a society where affluence an sustainability are harmonized," which is the summit the Showa Denko Group climbs toward.

About Showa Denko K.K.

Showa Denko K.K. ("SDK"; TSE:4004, US:SHWDF) is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. The Petrochemicals Sector provides cracker products such as ethylene and propylene, the Chemicals Sector provides industrial and high-performance gases and chemicals and high-purity gases and chemicals for the semiconductor industry, and the Inorganics Sector provides ceramics products such as alumina, abrasive, refractory and graphite electrodes and fine carbon products. Today, the Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum, the Electronics Sector provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys, and the Advanced Battery Materials Department (ABM) provides lithium-ion battery components. For more information, please visit www.sdk.co.jp/english/.

Source: Showa Denko K.K.

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