Enhancement of Fine Chemicals Business

Please be informed that Nippon Suisan Kaisha, Ltd. ("Nissui") has decided its policy for the construction of its new Kashima Plant and the merger between Nissui and its consolidated subsidiary Kyowa Tecnos Co., Ltd. as follows, in pursuit of the growth of its fine chemicals business as one of the specific measures under its basic strategy to "improve the profitability of its core businesses" pursuant to Nissui Group's medium-term management plan called the New TGL Plan, and its key strategy to "foster synergy and leveraging in Group management strategy".

I. Profile of Fine Chemicals Businesses in Nissui and Kyowa Tecnos Co., Ltd.
1. Nissui

Nissui sells pharmaceutical materials (EPA-E Nissui) and functional oils (EPA, DHA, etc.) manufactured at its Tsukuba Plant to industrial clients such as manufacturers of pharmaceuticals and food products, in addition to providing food for specified health uses and nutritional supplements.

2. Kyowa Tecnos Co., Ltd. (consolidated subsidiary of Nissui)

Kyowa Tecnos Co., Ltd. sells active pharmaceutical ingredients starting materials (APISM) manufactured at the head office/plant at Shibayama-machi, Sanbu-gun, Chiba Prefecture to Nissui, as well as chitin/chitosan, waxes of marine origin and special materials taking advantage of metallic sodium technology. It also sells them as industrial-purpose materials to customers in various fields.

II. Construction of Nissui's New Kashima Plant
1. Purpose and Expected Effects of Construction of New Plant

In April 2007, Nissui's new Kashima Plant will be constructed and launched at the site in Kamisu City, Ibaraki Prefecture purchased from Dainippon Ink and Chemicals, Inc. As the second-largest manufacturing base after Nissui's Tsukuba Plant, it will introduce advanced fish oil refinement technologies targeted at the fields of pharmaceuticals, functional materials and fish feed, in addition to cutting-edge technologies and state-of-the-art systems for manufacturing new materials.
At the same time, operations of Kyowa Tecnos' head office/plant will be consolidated into Kashima Plant, and the production functions of fine chemicals ingredients of Nissui and Kyowa Tecnos will be integrated, in pursuit of the optimization of oil logistics functions that are scattered across the Group, and with the aim of growing the fine chemicals business and improving its profitability through the selection and concentration of businesses and the sophistication of development functions.
Furthermore, collaborative efforts will be made with Tsukuba Plant-which currently manufactures pharmaceutical products and functional oils-in order to enhance operations in the cosmetics sector, in addition to the fields of pharmaceuticals and nutritional products (highly-unsaturated fatty acids, chitin/chitosan derivatives, waxes of marine origin, cholesterol products, etc.), with the aim of expanding the scope of the fine chemicals business.

2. Schedule (Plan)
	(1)	Construction Work-Phase I
		Construction to be completed in March 2007 Total amount of investment: Approx. 3 billion yen (including land cost) Main production items: Distilled and refined fish oils (pharmaceutical materials, functional oil materials), cholesterol products (cosmetics materials)
	(2)	Construction Work-Phase II
		Construction to be completed in March 2008 Total amount of investment: Approx. 3.5 billion yen Main production items: Fish oils in ethyl ester form (pharmaceutical materials), functional oils (EPA, DHA), waxes of marine origin (cosmetics materials), chitin/chitosan and derivatives, and other functional materials

[Profile of Kashima Plant]
Name :	Kashima Plant of Nippon Suisan Kaisha, Ltd.
Address :	18 Higashi-Fukashiba, Kamisu City, Ibaraki Prefecture (in the Kashima Coastal Industrial Zone)
Land Area :	30,000 square meters
Building Area :	Approx. 2,100 square meters (office wing & plant wing)
Commencement of Operations :	April 2007

III. Reorganization of Group Company

As part of the latest round of restructuring of the fine chemicals business, Nissui will merge with and absorb its consolidated subsidiary Kyowa Tecnos Co., Ltd. and transfer Kyowa Tecnos' businesses to Kashima Plant.

Merger Schedule (Plan)
Approval of merger agreement by the Board of Directors :	December 2007
Merger date :	April 2008

(Reference)
<Profile of Parties>

As of September 30, 2006

(1)  Trade name	Nippon Suisan Kaisha, Ltd.	Kyowa Tecnos Co., Ltd.
(2)  Business Activities	Marine products business, etc.	Manufacturing and sale of oils, chemical products and seasonings
(3)  Established	March 31, 1943	August 1, 1951
(4)  Address of Head Office	2-6-2 Otemachi, Chiyoda-ku, Tokyo	2759-3 Koike, Shibayama-machi, Sanbu-gun, Chiba Prefecture
(5)  Representative	Naoya Kakizoe	Yoichi Sekiguchi
(6)  Paid-in Capital	23,729 million yen	125 million yen
(7)  Main Production Plant of Fine Chemicals Business (Production Items)	Tsukuba Plant (pharmaceutical products, health foods, etc.)	Shibayama Plant (high-grade alcohol, chitosan and other materials)
(8)  End of Fiscal Year	March 31, 2006	March 31, 2006
(9)  Net Sales (Annual)	331,771 million yen	2,609 million yen