Doubling Production Capacity of the Blending Plant in Tianjin, China

Idemitsu Kosan Co., Ltd. (headquarters: Chiyoda-ku, Tokyo; President: Akihiko Tembo; hereinafter Idemitsu) is pleased to announced that its wholly-owned subsidiary Tianjin Idemitsu Lube Co., Ltd. has resolved on September 5, 2007 to double production capacity of the lubricants blending plant in Tianjin, China.

Idemitsu will invest a total of ¥700 million to this plant, which started operation in December 2004, in additional installments of blending tanks and filling machines to double the current production capacity of 28,000 kℓ a year to 56,000 kℓ by July 2008.

By adding the output from Changzhou Kuo Horng Petrochem Co. (location: Changzhou, Jiangsu province), a wholly-owned subsidiary of Kuo Horng Co., Ltd. (headquarters: Taipei, Taiwan), which Idemitsu has 25% ownership, Idemitsu's total production capacity in China will reach about 80,000 kℓ a year.

Tianjin Idemitsu Lube, as a foreign-funded commercial enterprise approved to operate in China following the approval of Measures for the Administration on Foreign Investment in Commercial Fields in 2004, plans to sell 25,000 kℓ of in-house and imported products in FY2007, and sales volume in all of China is expected to increase from 35,000 kℓ in FY2006 to 43,000 kℓ in FY2007.

Demand in China for high-performance lubricants such as automotive oils is expected to increase 10% a year, and Idemitsu intends to strengthen the supply system of lubricant products in China through this doubling of production capacity.