Harima Chemicals : to Acquire Additional Shares in Hangzhou Hanghua Harima Chemicals Co., Ltd.

Aug 7, 2023

To whom it may concern:

Company name: Harima Chemicals Group, Inc.

Representative: Yoshihiro Hasegawa, President (Code: 4410; Tokyo Stock Exchange Prime Market)

Address inquiries to: Shunichiro Taoka, Senior Executive Managing Director (Tel. [phone])

Harima Chemicals Group, Inc. to Acquire Additional Shares in

Hangzhou Hanghua Harima Chemicals Co., Ltd.

Harima Chemicals Group, Inc. ("Harima") has reached an agreement to acquire additional shares of its China-based consolidated subsidiary, Hangzhou Hanghua Harima Chemicals Co., Ltd. ("Hanghua Harima") from long-term partner Hangzhou Research Institute of Chemical Industry ("the Institute"). Established in 1997 as a joint venture between Harima and the Institute, Hanghua Harima manufactures and sells paper chemicals in East China.

The matter was approved at a Harima Board of Directors' Meeting held on August 5, 2023, with further details to be discussed at a later date.

1. Outline of Hanghua Harima

Name	Hangzhou Hanghua Harima Chemicals Co., Ltd.
Location	No.87 Hongda Road, Qiaonan-Qu, Xiaoshan Economic and
Technological Development Zone, Hangzhou, Zhejiang 311231, China
Representatives	Chairman: Yao Xianping, President: Lu Jianping
Business	Manufacture and sale of paper chemicals
Capital Stock	52 million Chinese Yuan (CNY)
Established	Dec 16, 1997
Net Assets	365 million CNY (As of Dec 31, 2022)
Total Assets	473 million CNY (As of Dec 31, 2022)
Main Shareholders	Harima Chemicals Group, Inc.: 56.07%
and	Hangzhou Research Institute of Chemical Industry: 43.93%
Ownership Ratio
	Capital Ratio	56.07%
Relationship with	Personnel	Secondee (including subsidiary staff):
Harima	3 Directors and several engineers (incl. expats)
	Business	None

Financial Results		2020	2021	2022
Net Sales	413 million	479 million	452 million
(CNY)
Net Income	62 million	44 million	41 million

2. Outline of the Acquisition

Shares Acquired	30% of all issued stock
Acquisition Cost	Undisclosed
	Increase ownership and enhance management fundamentals of
Purpose of Acquisition	Hanghua Harima, and consolidate Harima Chemicals Group
	revenue

3. Outline of the Institute

Name	Hangzhou Research Institute of Chemical Industry
Location	No. 7 Shi Hui Ba, Gongshu-Qu, Hangzhou, Zhejiang, China
Representatives	Chairman: Yao Xianping, President: Zhao Wenyan
Business Description	R&D of paper chemicals and chemical products
Established	1958

4. Future Outlook

As a result of the acquisition, Harima Chemicals Group's consolidated financials for the fiscal year ending March 31, 2024, are estimated to change as follows:

Net Income attributable to minority interest: decrease by approx. 200 million Japanese yen

Net Income attributable to Harima Chemicals Group: increase by the afore-mentioned amount.

Further updates with additional details will be provided as needed.