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Announcement on the Establishment of a Joint Venture towards the Construction of the Vietnam Nghi Son Refinery & Petrochemical Complex

March 27, 2008

To Whom It May Concern

Mitsui Chemicals, Inc.

Idemitsu Kosan Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo; President: Akihiko Tembo; hereafter “Idemitsu”) and Mitsui Chemicals, Inc. (Headquarters: Minato-ku, Tokyo; President: Kenji Fujiyoshi; hereafter “Mitsui”) hereby announce that each company has reached a decision to participate alongside Kuwait Petroleum International (hereafter “KPI”) and Petro Vietnam (hereafter, “PVN”) in the joint venture “Nghi Son Refinery & Petrochemical Limited Liability Company (tentative name)” in order to conduct detailed engineering design and construction of the “Vietnam Nghi Son Refinery & Petrochemical Complex.”

1. Overview of the Joint Venture

(1) Company Name (Tentatively) Nghi Son Refinery & Petrochemical Limited Liability Company
(2) Location Nghi Son Economic Zone, Thanh Hóa Province, Socialist Republic of Viet Nam
(3) Established To be established after acquiring an investment license in June 2008
(4) Paid-in Capital 200 million USD (approximately ¥20 billion)
(5) Investment Ratio Idemitsu 35.1%, KPI 35.1%, PVN 25.1%, Mitsui 4.7%
(6) Refining Capacity 200,000 bbl./day
(7) Construction Costs Approximately 5.8 billion USD (approximately ¥580 billion)
* Fundraising for a target 70% of the above to be raised through project financing

2. Future Timetable

Basic equipment design, economic efficiency and finance scheme will be materialized within around 2 years after establishing the joint venture, in order to determine whether or not to proceed with the construction. The commercial operation will be targeted to start at the end of 2013, after we proceed to the construction. We will make an additional announcement in the event we decide to proceed with the construction.

3. Rationale for Idemitsu’s Investment

  1. To contribute to the further development of the partnership with Vietnam by participating in the energy supply business, an extremely important business for the country which is experiencing continued rapid growth.
  2. To establish an earnings foundation in Vietnam through this transaction which allows Idemitsu to capture the rapidly increasing domestic demand for petroleum products in Vietnam, leveraging the construction and operation technologies accumulated in its petroleum and petrochemical businesses, based on a stable supply of Kuwaiti crude oil.
  3. To capitalize on further expected business expansion opportunities in Asia, including the petrochemical business and retail businesses dealing with petroleum products.
  4. To contribute to stable crude oil procurement by further strengthening the relationship between Idemitsu and the oil producing countries (Kuwait and Vietnam) through this joint enterprise between the two nations.

4. Rationale for Mitsui’s Investment

To ensure stable procurement of aroma raw materials in order to achieve stability and profit expansion in the PTA and phenol businesses.

5. Signing Ceremony

A signing ceremony is planned to take place in Hanoi, Vietnam in early April of 2008.

<Reference>
【Map of the Planned Construction Site for Nghi Son Refinery】

【Overview of Vietnam】

(1) Official NameSocialist Republic of Viet Nam
(2) CapitalHanoi
(3) PresidentNguyên Minh Triêt
(4) Prime MinisterNguyên Tân Dũng
(5) PopulationApproximately 84 million (approximately 60% of Japan)
(6) AreaApproximately 330,000 sq. km (approximately 88% of Japan)
(7) (norminal)GDPApproximately 60.8 billion USD
(8) Official LanguageVietnamese