Kuraray Co., Ltd.- Since 1926 -

ProfileEstablished: June 24, 1926Capital: 89 billion (as of March 31, 2008) Net Sales: 418 billion (as of March 31, 2008, consolidated) Employees: 6,770 (as of March 31, 2008, consolidated)

Major Businesses - Vinyl acetate derivatives (Poval, EVAL, KURALON, etc.) - Isoprene chemicals (TPE, Aroma chemicals, Pharmaceuticalintermediates, etc.)

- Man-made leather - Environment-related (PVA gel, Industrial membranes, etc.) - Medical (Dental materials, Hemocatharsis adsorption devices, etc.)

Kurarays History1926Kurashiki Kenshoku

1920s

PVA film commercialized Co.,Ltd. established 1960s 1964 Polyester staple / CLARINO 1928 Rayon commercialized commercialized1962

1940s

1949Renamed to Kurashiki Rayon Co., Ltd.

1970s

1969 Polyester filament commercialized 1970 Renamed to Kurary Co., Ltd.1972

Contact lenses / EVAL / nonwoven fabrics /isoprene chemicals commercialized 1978 Dental material commercialized

1950s

1950 KURALON commercialized 1958Poval commercialized (started to sell at a market)

Kurarays History2002

1980s 1983 Cement reinforcingKURALON developed

2000s2002 2004

1986 Production of EVAL resin

started at U.S.1990 VECTRAN / SEPTON

1990s

commercialized 1998 KURALON K-II cmmercialized 1999 Production of Poval resin started at Singapore Production of EVAL resin started at Belgium GENESTAR commercialized

2005

Production of Rayon ceased Acquisition of Clariants PVArelated products Production of SEPTON started at U.S. Acquisition of the PVB film business of HT Troplast Acquisition of VECTRAN business of U.S.-based Celanese Advanced Materials Inc. POVAL ASIA PTE LTD acquired and company made a subsidiary

2008 All outstanding shares of

Net Sales (consolidated)417.6)

400

385.3 375.1 354.9 332.1

300

200

0

03

04

05

06

07

FY

Round off the figure to the nearest 0.1 billion

Profit (consolidated)

50

48.1

Operating Income Net Income40 33.2 30 28.0 21.2 20 15.2 10 18.5 38.3

40.2

25.6 22.4

0

FY03

FY04

FY05

FY06

FY07

Round off the figure to the nearest 0.1 billion

Market PositionKuraray holds the worlds No.1 market share in the following businesses.Poval, polyvinyl alcohol resin (35%) PVA film for LCDs (80%) EVAL, ethylene-vinyl alcohol copolymer (70%) Vinylon, polyvinyl alcohol fiber (80%) Clarino, man-made leather (25%)(Estimated by Kuraray)

Maintaining International CompetitivenessAs of July,2008

Products for Environmental BusinessHigh-performance High-performance membranes membranes High-precision High-precision physical physical separation separation Purification of water Purification of water for potable use. for potable use. Water treatment for Water treatment for industrial uses. industrial uses. Wastewater treatment Wastewater treatment and reuse. and reuse. Municipal and Municipal and industrial wastewater industrial wastewater treatment and treatment and sludge reduction sludge reduction

PVA gel PVA gel

High-Performance High-Performance biological treatment biological treatment for wastewater for wastewater

Activated Activated carbon carbon

Absorption of contaminants Absorption of contaminants in water and gas in water and gas

Kuraray Chemical Kuraray Chemical Co., Ltd. Co., Ltd. (No.1 brand in Japan) (No.1 brand in Japan

Kuraray Hollow Fiber Membrane Products

Particle Size and Membrane TechniquesReverse Ultra Filtration Osmosis(RO) (UF) Micro Filtration (MF) Polyvinylidene-fluoride (hydrophilic) General Filtration

Lineup of Kuraray membrane0.001 10 S u c r o s e Io n H e m o glo bin

Polysulfone coated with PVA Polysulfone

Large pore

0.01 J a p a n e s e E n c e p h a li t i s V ir u s C o ll o i d a l S ili c a

0.1

1 B e e r Y e a s t

10m

ProteinsIon, Low Molecular Weight

Viruses

Bacteria Micro-particle Region

Colloidal Region

C r y p t o s p o ridiu m

E r y t h r o c y t e

E m ulsio n

S h i g e ll a

Features of Kuraray Membrane Products1. Material of the membrane (PVA-coated PSF and PVDF)Kurarays PSF and PVDF membranes have a hydrophilic property, which is achieved by a special coating technology with polyvinyl alcohol resin (PVA) (patented in Japan). The hydrophilic property has less fouling (see below). These products have heat & chemical resistant features, too.

Results of protein adsorption test More foulingNo treatment

Hydrophilic treatment

Less foulingKuraray PVDF Kuraray PSF Other PSF Other PVDF

Features of Kuraray Membrane Products2. Loose end structure of membrane element for external pressure filtration

Developed by Kuraray Suspended solids can be easily removed.

Others Suspended solids tend to accumulate at the lower potting part.

Dead end filtration suitable for raw water with high turbidity Drain

Risks of membrane fouling and breaking

Features of Kuraray Membrane Products3. Cartridge styleOnly the elements need to be replaced (low replacement cost).

4. Stainless-steel housingCan be installed outdoors.

5. External dead-end filtrationSimple pretreatment, simple equipment configuration, low energy.

6. Unique physical cleaning technology (patented in Japan)Effluent tank and pump for backwashing are not necessary. High recovery (No treated effluent is used for backwashing).

Unique Physical Cleaning Method (patented)Filtration Effluent Backwashing Compressed air Air scrubbing Drain

Influent

Air Suspended solids are accumulated on the membrane surface during filtration. Compressed air is injected into the effluent side. The water inside the module flows back and the solids on the membrane are exfoliated. Suspended solids are further removed and dispersed by air scrubbing. The concentrate in the module is drained from the bottom.

Applications of Kuraray Membrane Products 1Ultra pure water treatmentPretreatment of RO membraneFinal filter of ultra pure water plant Point of use Recycle2Potable water treatment

3Purification of beverages, chemicals 4Recycle Hot water Silicon Absorbent for absorption refrigerator (LiBr solution)

R a w

W a t e r

C l a rif y

A c tiv a t e d C a r b o n P r o t e c t i o n F il t e r

Pretreatment

pure water recycle process

Ultra Pure Water Production Flow

R O M e m b r a n e D e g a s sin g

Primary system

UF Cartridge Type C, S Point of use UF Cartridge Type C, S

Io n E x c h a n g e

U V O xid a tio n

Sub system

Io n E x c h a n g e U F M e m b r a n e

Pre-treatment for RO MembranesGS module pore size: 0.02m m. surface area: 42 m2

Standardized by many engineering companies in Japan (Kurita, Nomura, Hitachi Plant etc.)Top market share

GS (external pressure)

Kurita Water Industries Ltd.

Wastewater Treatment and RecycleInorganic wastewater of semiconductor industries (dicing, back-grind, and beveling process) and FPD industries (grinding and rinsing process of the glasses for LCD and PDP).

Over 100 applications SF moduleEnergy saving because of external dead end filtration.

Recycle as raw water for ultra pure water

SF element (external Membrane surface area

pore size0.02m

T7 tank module : element7 Membrane surface area49

Kuraray Products for Semiconductor and Photovoltaic Industries recycle of silicon and ultra pure waterRecycle of coolant Recycle of coolant for wire-saw process for wire-saw processSilicon material Multi-crystal silicon ingot Recycled by filtration with Kuraray original large pore (2.5m) membrane. Ordinary waste Silicon wafer PV cell PV module

Slicing Semiconductor Single-crystal ingot Silicon recycle Ingot processing Dicing, back grindingOriginal loose-end structure

Silicon Silicon (wasted or Ordinary (wasted or recycled) recycled) waste

Recycle of Recycle of ultra pure ultra pure water and water and silicon silicon

Recycle of Recycle of ultra pure ultra pure water water

Hollow fiber membrane High efficiency to drain suspended solids

Suitable for wastewater with inorganic particles

SF for Wastewater Treatment and Recycle : Main Applications and UsersField Semiconductor LCD glass LCD panel LCD color filter PDP glass Process dicing, back grinding, beveling glass grinding rinsing rinsing grinding, rinsing Principal users (companies) R, S, S, F, etc. C, N, etc. S, P, etc. T, etc P, etc

Over 100 applications

Small Sized UF Type-C and Type-S *Small size (2m2 for Type-S and 4m2 for Type-C) *Two filtration limits (MW cut off: 5,000 and 13,000) *External dead-end filtration (unique for UF, energy saving) *Cartridge style (Type-C) (easy and cost effective for replacements)

Type-C (4m2)

Type-S (2m2)

Small Size UF Type-C and Type-SExamples of applications Semiconductor and electronics industries: Filtration of ultra pure water. (Production facilities and point of use) Medical and pharmaceutical industries: Production of aseptic and pyrogen-free water. Other water purification

Applications of Kuraray Membrane Products1Ultra pure water treatment Pretreatment of RO membrane Final filter of ultra pure water plant Point of use Recycle

2. Potable water treatment

3Purification of beverages, chemicals 4Recycle Hot water Silicon Absorbent for absorption refrigerator (LiBr solution)

Potable Water Treatment ProcessRaw Water River, Well, Lake, Spring etc. Coagulating Sedimentation Coagulant Sand Filtration Disinfection Distribution

Most Common, Cheap

O & M is troublesome (small scale) Pathogenic protozoa (Cryptosporidium)

Raw Water

Filtration by

Disinfection

Distribution

High cost expense of membranes) High energy cost

High quality of effluent perfect removal of pathogenic protozoa Automatic O & M

Over 600 applications in Japan (2007)

Potable Water Treatment ProcessFirst large potable water plant using membrane filtration in Japan.

Internal pressure UF (Installed in 1997)Ogose Town, Saitama Pref. Produced by Kurita Water Industries Ltd.

4,000 m3/d

Large Pore: External Dead-end FiltrationRaw Water River, Well, Lake, Spring etc. Coagulating Sedimentation Sand Filtration Coagulant

Large Pore 2.0m

Disinfection

Distribution

Worlds largest porosity for hollow fiber.

Removal of pathogenic protozoa (Cryptosporidium). Post-treatment of existing process. Cost effective High flux Small amount of modules

Low pressure Pump-free operation

Large Pore: Removal of CryptosporidiumOuter surface Inner surface membrane

Cross section

AppearanceModel particles of Cryptosporidium (5m)

Type of Filtration Rapid Sand Filtration Slow Sand Filtration Membrane Filtration

Removal Capability 99.7 99.9Same as ordinary MF

Porem

99.9999

> >99.9999% > >99.99999% Hirata, Powder and Industry, Vol.34,No.3(2002)

Large Pore: Pump-free SystemOrdinary MF/UF systemRaw WaterRaw Water Tank

Feed pump is necessary. ~30mH

Ordinary UFMF

Effluent

Large Pore systemRaw WaterRaw Water Tank

Pump-free system is available. (low power expense)

35m of water head

Large pore

Effluent

Large Pore: Example of InstallationOne of the largest potable water plant using membrane filtration in Japan. Raw water tank Filtration units Disinfection

30,000 m3/d(Installed in 2004) Distribution

Shallow well

Pump-free operation

Hamura City, Tokyo Pref. Produced by Suido Kiko Co., Ltd.

Applications of Kuraray Membrane Products1Ultra pure water treatment Pretreatment of RO membrane Final filter of ultra pure water plant Point of use Recycle 2Potable water treatment

3Purification of beverages, chemicals4Recycle Hot water Silicon Absorbent for absorption refrigerator (LiBr solution)

Food IndustriesPurposes of filtration for food industries = Removal of bacteria, enzyme, suspended solidOverwhelmingly top market share in Japan

1. SakeOver 400 plants (40%) 2. Soy sourceabout 40 plants 3. Vinegar10 plants 4. OthersSoft drinks, beer, etc.Acid-resistant module

Applications of Kuraray Membrane Products1Ultra pure water treatment Pretreatment of RO membrane Final filter of ultra pure water plant Point of use Recycle 2Potable water treatment 3Purification of beverages, chemicals

4RecycleHot water Silicon Absorbent for absorption refrigerator (LiBr soln.)

Filtration of Hot Water (recycle of boiler drainage)

Membrane: SF with heat resistance up to 99 Pore size : 0.1 m Membrane surface area 7 Filtration styleExternal dead-end

Standardized by Self-Defense Force

Over 150 applications

Absorption Refrigerator: Recycle of Absorbent (LiBr solution) Overwhelminglytop share in Japan

PSV filter

Contamination of absorbent

Reduction of machine life. Decrease of freezing capability. Increase of fuel consumption.

Kuraray New Membrane ModulesLaunched in 2009

Smaller (2m2)

Larger (25m2)

Large-pore membrane for potable water

Submerged PVDF membrane (8m2)

RO-pretreatment membrane50m2

PVA-gel Beads A Carrier for Immobilization of Microorganisms

Conventional Biological Wastewater TreatmentLarge tank, large footprint Wastewater (organic contaminant) AirSludge return

Microbial degradation

Solid-liquid separationSedimentation tank

Discharge supernatant Large amount of industrial waste

[Excess sludge]Microorganism grows by eating organic substances (about 50% of organic substances (BOD) converts to CO2/H2O and the rest converts to excess sludge). The excess sludge must be wasted periodically.

Activated sludge (sludge is the mixture of bacteria, protozoa and metazoa.)

PVA-gel Beads: A Bio-carrierMaterial: Polyvinyl alcohol (PVA) Size: 4- or 5-mm beads Specific gravity: 1.025

Protozoa, MetazoaMicroscopic structure Microscopic structure

Only bacteria enter PVA gelOnly this retained

Bacteria Protozoa Metazoa

Examples of bio-carriers

Microscopic structure Microscopic structure

Kuraray PVA-GelMost of them do not have porous structures like PVA-Gel. (bacteria is retained only on the surface with protozoa and metazoa.)

Characteristics of PVA-GelPVA-gel has a micro-porous structure in which PVA-gel has a micro-porous structure in which bacteria can be retained. bacteria can be retained. Quite high load is possible. Quite high load is possible. (5 times or much higher than conventional activated sludge) (5 times or much higher than conventional activated sludge) PVA-gel can also be used for biological nitrification PVA-gel can also be used for biological nitrification and denitrification processes. and denitrification processes. The amount of excess sludge can be reduced or eliminated. The amount of excess sludge can be reduced or eliminated. (We have some special techniques to reduce excess sludge (We have some special techniques to reduce excess sludge dramatically with PVA-gel.) dramatically with PVA-gel.)

Comparison of CapabilityConventional system Activated sludge tank Tank volume can be reduced to 1/6, or volume load can be increased by 6 timeskg/m3-

Mixture of Bacteria, protozoa, metazoa, etc.

PVA gel (10 % vol. packing)Only effective bacteria PVA gel tank Countless bacteria are retained in PVA gel.

kg/m3d

4

3 2 1Volume load

x6

0

Activated sludge

PVA gel PVA

High Efficiency and Low Excess SludgeConventional system Activated sludge tankExcess sludge (about 50% of BOD) Sedimentation tank

Effluent

PVA gel (10 % vol. packing)Effluent Coagulant PVA gel tankExcess sludge (about 30% of BOD) No sludge return

Activated sludge Sludge is returned only tothe activated sludge tank.

Effluent

Nitrogen removal is also possible with an different process.

Excess sludge (about 20% of BOD)

Sludge Problem in JapanSolid waste production (2002) 1% 2% 2% 2% 4% 2% 2% 6%

Running cost for WWTPsChemical cost 7%

Sludge 47%

Construction materials 15%

Total Amount 44,600,000 ton

Electric cost 25%

Sludge disposal cost 50-70%

Animal waste 17%

Sludge reduction challenge

PVA Gel: Sludge Reduction SystemConventional system Activated sludge tankSedimentation tank

Effluent

Excess sludge(about 50% of BOD)

New PVA-gel systemAutolysis PVA gel tank Sludge reduction tank Solid-liquid separation

Effluent

Smaller tanks

Almost no excess sludge (organic)

The reduction of the excess sludge can be achieved by the autolysis (endogenous decay) of the sludge in the sludge reduction tank.

Sludge Reduction with PVA Gel: Endogenous Decay Total OxidationOther carriers, activated sludgeProtozoa, metazoa, and bacteria, grow on the surface. Protozoa and metazoa

PVA GelBacteria grow inside PVA gel

Protozoa Metazoa Bacteria

Excess sludge0.08

Bacteria

(/day) Sludge reduction rate0.06 0.04 0.02

Only this retained in PVA gel

Bacteria Protozoa Metazoa

Sludge reduction becomes easier

0 Activated sludge PVA gel

Kuraray Sludge Reduction SystemSedimentation type TYPE-SSludge reduction tank

Sedimentation tankEffluent The most cost effective for conversion of existing activated sludge process

PVA gel tank

Membrane filtration type TYPE-MEffluent

*No sedimentation tank *Smaller sludge reduction tank(higher MLSS)

Submerged membrane

*Recyclable water

Patented in USA, European and Asian countries. Nitrogen removal is also possible with a different process

Example: Sludge Reduction System (Type-S)Kuraray Saijo Plant (400m3/d)Gel separator (2 mm mesh)

BOD removal and sludge reduction BOD removal and sludge reduction

Sludge reduction tank

PVA Gel tank (BOD removal)

No excess sludge No excess sludge for 10 years! for 10 years!X 1.5 Sedimentation tank

Example: Sludge Reduction System (Type-M, in Taiwan)RO membrane PVA gel + sludge reduction (installed underground)Biodegradation of organic contaminant Sludge elimination by autolysis

85% of the wastewater can be recycled as ultra pure water. Greatly reduced excess organic sludge by autolysis.

RO membrane Submerged membranePVA gel tank Sludge reduction tank

Technical Service System in JapanEnd user Inquiry Sample Engineering firm Test result & proposal Kuraray 1. Small scale testing in Kurarays laboratory: (1) Evaluation of filtration behavior. (flux, physical cleaning, chemical cleaning) (2) Evaluation of biological treatability. (3) Analysis (Influent, effluent). 2. Pilot-testing units available for long-term tests Kurarays technical services are sought-after in Japan Biological treatment test unit Filtration test unit

Thank you