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<5th IT-2010 IR Seminar>

Expansion Strategy of Water Treatment Business 19th December 2008

Toray Industries, Inc

Executive Vice President and General Manager of Water Treatment & Environment Div. Akihiro Nikkaku

General Manager of Water Treatment Div. Hideo Sato

1 Contents:

1.Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

2 Global Environmental Issues: Co2 and Water

Water Issue (Water Shortage and Water CO2 Issue Pollution)

Acid Rain Desertification

Diminishing Global Warming Rain Forest

Pollution Issues Ocean Pollution

Destruction of Waste Problem Ozone Layer

3 Toray’s Approach toward Global Water Environment Issue

Global Environmental Issue: Water became a focus at World Economic Forum 2007 (Commonly known as:Davos Conference) Jan 25,2007,Davos: Toray co-sponsored Special Japanese Sushi Reception 2007 , which was hosted by Water Forum (JWF)

The 1st Asia Pacific Water Summit (Beppu, Japan): Organizer: APWF(JWF) Dec.3-4, 2007, Beppu: Toray attended at CEO PANEL and made the presentation titled “Membrane Technologies meet to the Solution of the Subjects on the Global Water Environment “

Toray attended the Liberal Democratic Party research group on water security Mar.23, 2008, Toray made a report on “Approach to Rapidly Growing Global Water Business Market” as one of the major members of Council on Competitiveness- Nippon (COCN)’s “Technologies for Effective Utilization of Water Treatment and Water Resource Project” Toray participated in Singapore International Water Week

June 23-27, 2008,Singapore:Toray gave a keynote speech at Japan Business Forum. Theme: “Global Market Trend on Advanced Water Treatment and Japanese Contribution by Technology”

4 Present Situation of Water Resource *World population is 6.5 billion 1.1 billion people cannot access to good drinking water (including water for daily life) 2.4 billion people do not have sanitary accommodations (wastewater and human waste treatment ) Present water situation in the world (Source:IWMI Report 2006)

★★GlobalGlobal ””WaterWater shortageshortage”” is is thethe keenestkeenest issue,issue, itit isis expectedexpected toto becomebecome eveneven moremore serious.serious. 5 Contents:

1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

6 Position of Water Treatment Business in Toray

Eco-friendly Fibers Organic Synthetic Information / High-performance Films Telecommunication / Chemistry Electronics Nano-alloy Plastics Automobiles / Advanced Electronics Polymer Science Aircrafts Materials

Carbon Fibers Life Sciences Biotechnology Composite Materials High-performance Environment / Membranes Water-related / Energy

Nanotechnology Recycling Materials EnvironmentEnvironment related related BusinessesBusinesses  Medical Products & WaterWater Treatment Treatment Business Business  Pharmaceuticals NonNon petroleum-origin petroleum-origin materialsmaterials  NewNew energy-related energy-related materialsmaterials DevelopDevelop WaterWater TreatmentTreatment BusinessBusiness asas aa “Strategically“Strategically DevelopingDeveloping Business”Business” toto aa corecore ofof EnvironmentEnvironment relatedrelated BusinessesBusinesses 7 Organization of Toray’s Water Treatment Business

Technology Center

Business Div. Mfg. Div. R&D Div. Technology Center Engineering Div. T M M e f f g c g h . .

. D F G u e C E R n v l n e o

President Water Treatment Div. e e c S T W n g b s N l t e p o t i i e a

RO Membrane a

Membrane n o e e c e p a l t w r e n h

c e

Products Dept. m r

Production Dept. E e a n c i r

a n F L r Membrane e MF&UF Membrane l h o L T

i l r v a n M n t

l a r Technical Dept. o L y o

Products Dept. i b t g e r b a n

a g o o C a M Water Treatment System Dept. t o t D b y e r n t i e r a m a e o

e

. r m a n C t i t r r v a e e t o s t a e e o e e l r n r

t n s n i l r R r i o t a Water Treatment & Environment Products o e i

t t

e a e r e l

p s s R i s n s

Quality Assurance Dept. r e m

e e d s a

Water Treatment & Environment Business s e

P r e n

Planning & Administration Dept. c r a t o h

r c d

h u

c t s

Subsidiaries Toray Membrane USA, Inc. (TMUS, Toray 100%) Toray BlueStar Membrane Co. Ltd. Toray Fibers & Textiles Research Laboratories (China) (TBMC, Toray G 50.1%) Water Treatment Toray Membrane Europe AG Research Labs. (TMEu, Toray 90%) Suido Kiko Kaisha, Ltd. 8 2.World Water ProblemsIncrease and Water Related of WorldMarkets Population and Development of Water Treatment Technologies

World population Energy consumption Population Comparison by Seawater (Billion) ⑤Membrane Desalination processes 3

C (kg/m ) 10.0 treatment a 15 r ④Thermal b o

8.0 n ~10

③Rapid filtration e 10 m Abt. 80% i 6.0 s reduction ②Treatment by s i o

microorganism n 5

4.0 ①Slow filtration e

q ~2 Natural purification u i v

2.0 a 0

l RO e Distillation

n method

t method 0 08019001700 20001800 2100 【Estimated by Toray】 Difficult to secure quantity and quality of water only by natural purification due to the rapid increase of population

MembraneMembrane technology,technology, whichwhich enablesenables precise precise control control ofof waterwater qualityquality andand highhigh speedspeed treatment,treatment, isis essentialessential inin 2121stst centurycentury 9 History of Toray Membrane Technology & Water Treatment Business Period ~1960 ~1970 ~1980 ~1990 ~2000 2001~

1968Started Research on RO Membrane 1953 USA launched RO concept. 1980Started marketing RO Membrane for ultra pure water plants 1960 RO/NF J.F. Kennedy made a speech 1996 Installed in a large brackish water desalination plant Membrane on a seawater desalination. 2001 *Next year, in 1961, he decided Installed in a large seawater desalination plant to approve a seawater desalination 2003 as a national undertaking as the Installed in the world’s largest President. wastewater reuse plant 1990 Started research on UF membrane Hollow Fiber 2000 Started research on MF membrane UF/MF 2002 Membrane Started trial marketing on MF membrane 2007 Installed in the largest membrane plant in Japan 1996 Started research on MBR Submerged 2003 Membrane for Started trial marketing MBR 2008 Installed in a large plant in Middle East 10 Types of Membranes and Toray’s Membrane Products

Size 0.001 ㎛ 0.01 ㎛ 0.1 ㎛ 1 ㎛ 10 ㎛ S

m Ion, Low molecule High molecular e p a weight organics weight polymer Colloid t a e r r a Trihalomethane Agricultural & Organic Material Clay i t a i l o s n Bacteria Coliform Cryptosporidium Monovalent Ions Multivalent Ions T y

p Low Pressure e s RO (Reverse Osmosis) NF (Nanofiltration) UF (Ultrafiltration) MF (Microfiltration) T

o Municipal Drinking Water, Reuse of

r Ultrapure Water, Softening, Sewage Water Treatment

a Wastewater,

y Seawater Desalination, Removal of Toxic

’ Pretreatment for Seawater s Wastewater Reclamation substance Desalination m e m b r a n e

p r o d u c t s RO NF UF MF MBR Membrane Membrane Membrane Membrane

11 Membrane Manufacturers in the World 【Investigated by Toray】 RO MFUFNF MBR

DOW (US) Filmtec◎ Filmtec◎ Omex○ Omex○ Koch (US) UOP UOP Abcor Abcor○○△○ Puron○ General Electric (US) s Osmonics Osmonics○○ Zenon Zenon◎◎ a

e Siemens (Germany) Memcor◎ Memcor○ s r Norit (Netherlands)

e X-Flow ○◎ v Woongjin Chemical (Korea) ○○ O Saehan Saehan MOTIMO (China) ○○○ Vontron (China) ○○ Toray ◎ ○ ○ ○ ○

Nitto Denko (Hydranautics) (Hydranautics)◎◎ (Hydranautics) (Hydranautics)○○ Mitsubishi Rayon

e ○○ s

e ○ △○ n

a Daicel Chemical ○○ p

a Asahi Chemical ◎○ ○ J Kubota ◎ ◎ :High share product ○:product in the market △:under development 12 Policy of Toray’s Water Treatment Business

By utilizing superior membrane technologies and all variety of membrane products, - Expand and Strengthen global sales system - Strengthen profit structure by arrangement of production systems and increasing production capacity

Become “Number One” of the Membrane Business by 2010.

13 Rapid Expansion of Global Water Issue and Water Treatment Market

Drought Area & Water Treatment Market Source: IWMI Report 2006

China America North Africa Caribbean Sea Spain

Middle India East

Australia Solution of both water quantity and quality (Boron and Arsenics) is necessary for countermeasure of Global Toray’s Business Water Issue. Our targets are drought areas of the world. Expansion 1.Middle East/North Africa region is the most expanding market. Toray has a good track record and continue to Strategy focus the market. 2.As for the USA, Toray has established local production facility already. Toray attacks this World’s 2nd largest market 3.Australian market has just taken off. Toray started strategic sales in this market. 4.China is the largest potential market in the world, and Toray will expand the business in the country by new business structure. For achievement of above, Toray strengthens Global Sales Team and production capacity. 14 Toray Water Treatment Global Sales Team

TMEu TMUS (Europe, Middle East, Africa) (Americas)

TBMC (China) TORAY (Japan,Asia,Australia) ()=Increased Number for Last 2Years Major Sales office (5→6) Sales office TAS (5→13) (Asia Pacific) Agency (11→13) Sales Staff : 60% up

JapanJapan isis inin chargecharge ofof salessales forfor AsiaAsia andand OceaniaOceania togethertogether withwith TASTAS TBMC:TBMC: ChinaChina TMEu:TMEu: Europe,Europe, ME,ME, Africa,Africa, TMUS:TMUS: AmericasAmericas 15 Global Network Led Success at Shoaibah Project

Doosan Group Technical Advisor Developer (KSA) (UAE) EPC Design Operator (KSA) Doosan Doosan Hydro Technology (Korea) (Florida,USA)

Investor (KSA) Capacity 150,000m3/d SWCC (KSA) Plant Location KSA

TMEu TMEu TAS TIK Toray TMUS Dubai Riyadh Singapore Korea Japan San Diego ①In case of large scale project, the operation is proceeded in the form of combining multiple companies playing their role, therefore it is essential to approach to each one of them. ②Even though the location of this project was KSA, the related companies were operating world wide: (a) Technical advisor (UAE), (b) Developer & Operator (KSA),(c) Investor (KSA), (d) EPC & Design (Korea and USA) and others. ③Toray’s Global Sales Team reacted well to this circumstance, and played their part in their region keeping good mutual coordination, which resulted in winning this project. 16 Establishment of Joint Venture in China-1

28th November, 2008 Signing Ceremony of TBMC JV Agreement

17 Establishment of Joint Venture in China-2

OutlineOutline of of Toray Toray BlueStar BlueStar Membrane Membrane Co., Co., LTD. LTD. (TMBC) (TMBC) <Background of this JV 1.1. Main Main businesses: businesses: Manufacturing, Manufacturing, sales, sales, application application Establishment> developmentdevelopment and and technical technical service service of of the the following following water water treatmenttreatment membranes membranes as as well well as as their their export export and and import. import. “Jieneng“Jieneng Jianpai Jianpai”” (Save (Save Energy& Energy& (1) RO membrane and RO membrane element (1) RO membrane and RO membrane element Emissions-Reduction)Emissions-Reduction) and and “Ling “Ling Paifang Paifang”” (Zero-Emission) Policy of China Gov. (2)(2) NF NF membrane membrane and and NF NF membrane membrane element element (Zero-Emission) Policy of China Gov. (3)(3) Submerged Submerged MF/UF MF/UF membrane membrane element element (4)(4) Submerged Submerged module module of of MF MF flat flat sheet sheet for for MBR MBR 2. Location: Beijing, China ForFor realizing realizing this this policy, policy, Wen Wen Jiabao Jiabao 2. Location: Beijing, China instructed BlueStar to establish “State- 3. Established: May 2009 (scheduled) instructed BlueStar to establish “State- 3. Established: May 2009 (scheduled) classclass Water Water Treatment Treatment Company” Company” urgently urgently 4.4. Capital: Capital: 35 35 million million USD USD (about (about 3.5 3.5 billion billion yen) yen) 5.5. Investment Investment ratio: ratio: TorayToray Industries, Industries, Inc. Inc. – – 40.1% 40.1% (China) Co., Ltd. Toray Industries (China) Co., Ltd. BlueStarBlueStar approached approached Toray Toray since since Toray Toray developed all kinds of water treatment (a(a Toray Toray subsidiary)- subsidiary)- 10.0% 10.0% developed all kinds of water treatment membranesmembranes by by herself. herself. ChinaChina BlueStar BlueStar & & BC BC group group Co., Co., Ltd- Ltd- 49.9% 49.9% 6.6. Production Production facility: facility: RO RO membrane membrane production production facilities facilities AutoAuto winders winders for for RO RO element element ・China is a huge growing market for water * *Beginning Beginning of of construction: construction: May May 2009 2009 ・China is a huge growing market for water treatment, and annual growth ratio of RO StartStart of of operations: operations: April April 2010 2010 (expected) (expected) treatment, and annual growth ratio of RO market exceeds 20% in China. * *Location: Location: Industrial Industrial development development area area of of market exceeds 20% in China. Shunyi Airport in Beijing ・ Shunyi Airport in Beijing ・TorayToray can can contribute contribute to to environment environment * *Capital Capital investment investment for for new new plant plant improvementimprovement in in China. China. construction: about 500 million CNY ( ) construction: about 500 million CNY (MeetingMeeting Toray’s Toray’s Corporate Corporate Philosophy Philosophy) (about(about 7.5 7.5 billion billion yen) yen) 18 China Business Development of Toray’s Water Treatment (Main Awarded Projects)

By usage/by membrane Changde Liaoning 16,500m3/d 14,400m3/d RO Seawater Zhuanghe Desalination 12,700m3/d RO Wastewater Ningxia Shanxi Tianjin TEDA Reclamation 77,760m3/d 20,000m3/d 30,000m3/d RO Brackish Water Desalination Tianjin 北京 大連 18,000m3/d UF・MF(River Water 天津 Purification) Dongjiao 寧夏 山西 12,000m3/d MBR(Wastewater Treatment) Hebei Canzhou 18,000m3/d As of November 2008 上海 Shanghai 12,000m3/d 雲南 東莞 深圳 Zhoushan Is. 31,850m3/d Yunnan Dongguan 香港 Shenzhen Zhejiang 24,000m3/d 25,000m3/d 6,500m3/d 34,600m3/d 19 Expansion of RO Production Capacity

TBMC (Beijing)

TMUS Toray (Ehime) (San Diego)

For RO membrane production, Toray established the Japan-U.S. production capacity by the end of fiscal 2007 in order to meet rapid demand increase. From 2008 onward, Toray produce all the RO elements by its leading-edge automatic winder. As a result of above, production capacity of RO elements is increased, Ehime: 2 times and San Diego: 4 times, as a total: 2.7 times as much the capacity of March 2007. In addition to above, it will be expanded 4 times as much as the capacity of March 2007 when TBMC started its Production. 20 Contents:

1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

21 RO (Reverse Osmosis) Membrane

Feed Water Separation layer Crosslinked aromatic polyamide 200 nm

200 nm Surface structure of RO membrane

eate Polysulfone Perm ube supporting layer ter t Cen 45 μm

e Brin l ter sea wa ine cer Br spa Polyester non-woven fabric ater d w Fee 100 μm r ate d w ne Fee bra em m RO er Structure of RO membrane r pac ate te s d w mea Fee r Per Permeate ate d w Structure of RO membrane Fee element 22 Representative Global Sales Expansion of Toray RO Acquired Projects 【As of Aug.08】

RO for > 3 3 Seawater 136136 kmkm3/d/d 200200 kmkm3/d/d 150150 kmkm33/d/d Desalination > 9393 kmkm33/d/d 136136 kmkm33/d/d

RO for Wastewater Reclamation ● ● ● ● ● ● ●● ● ● ● ●● ● ● ● ● ● ● ● ● ● ● ● ●●● ●● 3 ●● ● ● 320 km 3/d ●● ● ● 320 km /d ● ● ● ● ● ● ● ● ● ● ● ●● 3 ● 228228 kmkm3/d/d ● ● > ● 7878 kmkm33/d/d

RO for Brackish > > Water Desalination 120120 kmkm33/d/d 100 km33/d 100 km /d (Equivalent to Water Production) Total Shipment of RO:14 mil m3/d(equivalent to daily life water of 60 million people) (including)Seawater Desalination : 2.8 mil m3/d (≒daily life water of 10 mil people, Top share ) Wastewater Reclamation : 1.0 mil m3/d(Supplied to World’s 1st and 2nd largest Plant) Brackish Water Desalination : 7.0 mil m3/d (Largest application, main market is USA, ME,FE)

23 Features of Evaporation Methods and MembraneMembrane Method

Seawater is evaporated and condensed to obtain Evaporation Evaporation Heated steam and evaporated seawater are condensed. freshwater. One of the main evaporation methods Method Method Efficiency is higher than MSF, but complex. for the desalination of seawater in the Middle East (MSF) (MED) Seawater Seawater

Cooling, Condensation Cooling Steam Heated recovery Evaporation Condensation of steam steam Evaporation Freshwater Freshwater

Heat Condensed (Steam) Condensed seawater seawater Features: By parallel establishment with an electric power plant, it can utilize the heat sources. (The reason why it is the mainstream in the Middle East.) It requires almost no preprocessing and provides simple operation. (MED is rather complex.)

Membrane Separation Pressurized water is transported across the membrane. Method (RO) Multi-staging is available as required for the water quality.

Low- High-pressure RO pressure RO

Seawater Freshwater

Condensed Preprocessing seawater

Features: Low facility cost 0.5 - 0.9 times compared to evaporation methods Low seawater usage (High recovery rate) 1/4 or less compared to evaporation methods Low energy consumption (Heat + Electric power) 1/5 or less compared to evaporation methods 24 RO Membrane for Seawater Desalination: Technology Progress and Desalination Cost Reduction 1. Improved performance of RO membranes 2. Decline in RO membrane costs per (lower permeability rate) volume of water produced

1.5 1.4 e 120 m 100.0 u o l i

100t o ) a v % r / ( 1

t e 1 80d g s e

a 0.8 o c s c u s 60 a d e P o

0.5 n

r a t 0.5 0.4 40 l r p

27.8 a b r 19.8

S 15.9

0.2 e m 20t 9.8 9.7

e a f

0 M o w 0 1978 1989 1995 2000 2002 2006 1978 1989 1995 2000 2002 2006 IDA news Water, Start of plant operation Start of plant operation 15 , 9-10 (2006). 4. Comparison of water production costs for RO with 3. Changes in desalination energy evaporation systems (MSF, MED) Example of water production cost comparison Shuqaiq (Saudi Arabia): 210,000 m3/day 1.5 14 1.33 1.38 s t ) ) s 3 3

12 o c m 1.03 m ) / / n 3

h 10 o

h 1 i W m t / k c s ( W 8 r u

a K d l l ー o ( 6

r o ギ y p D 0.5 ( ル r g 4 e r t ネ e a

エ 2 n W E 0 0 1970 1980 1990 2000 ADC 2006 ROMSFMED Global Water Intelligence, D&WR, 16(2), 10-22 (2006). Period August (2006). Evaporation systems RORO methodmethod isis introducedintroduced toto globalglobal waterwater stressstress areaarea asas keykey processprocess ofof desalinationdesalination technologytechnology byby ItsIts technologytechnology progressprogress andand costcost reduction.reduction. 25 Development of High Boron Rejection RO Membrane

ByBy quantifying quantifying sub-nanometer sub-nanometer (1/10 (1/10 nanometer nanometer or or 1/1 1/1 billion billion meter) meter) pore pore size size distribution distribution ofof RO RO membrane membrane for for seawater seawater desalination, desalination, Toray Toray Group Group has has become become the the first first substantiatorsubstantiator of of correlation correlation between between rejection rejection ratio ratio of of Boron, Boron, hazardous hazardous material, material, and and porepore size size distribution distribution in in the the world. world. Based Based on on this this information, information, Toray Toray has has succeeded succeeded the the developmentdevelopment of of “ “HighHigh Boron Boron Rejection Rejection RO RO Membrane Membrane”,”, of of which which sub-nanometer sub-nanometer pore pore size size isis controlled controlled by by Toray’s Toray’s original original polymer polymer designing designing technology. technology.

Boron RO can remove almost all the Removal by RO for ・Seawater has high density Boron than the material, but conventional river water. seawater desalination RO can hard to remove Boron since it is too small. ・Boron has toxicity, and it causes human reproductive dysfunction and orange wilt.

By designing suitable pore sized

) 100 polymer, Toray has developed %

High Performance RO (

) 98

e new high performance RO with t % a ( r

96

l increased Boron rejection 率 Toray and Toray Research a Membrane D v 94 去 performance (20% decreased Center have become the o Membrane C m 除

e 92 Boron concentration than r first substantiator of 素 Membrane B n

ウ ) o 90 conventional RO . Boro correlation between r Membrane A ホ o rejection ratio of Boron and B 88 ROMembrane n pore size distribution. 86 0.40 0.50 0.70 0.60 0.80 Support 空孔直径(nm) nm Pore Size Layer Pore 空孔直径とホウ空孔直径とホウ素除去率の素除去率の関係 関係 Correlation between Boron rejection and Pore size Non-woven Fabric 26 Received Nikkei Global Environmental Technology Award

1. Pore-size control technology of RO membrane by using nanotechnology 2. High Boron rejection membrane developed by the technology In recognition for these technologies, Global Environmental Lab. of Toray received the 18th Nikkei Global Environmental Technology Award.

27 Toray’s Supply for Large Seawater Desalination Plants as of October 2008 Capacity *1 Operation No. Country Location Notes m3/d Year *2 1 Algeria Hamma 200,000 2008 2 Saudi Arabia Shuaibah 150,000 (2009) 3 Trinidad & Tobago Point Lisas 136,000 2002 3 Singapore Tuas 136,000 2005 3 UAE Fujairah 2 136,000 (2010) 3 Kuwait Shuwaikh 136,000 (2010) 7 Algeria Oued Sebt 100,000 (2010) 8 Israel Palmachim 92,250 2007 9 Saudi Arabia Al Jubail-III 90,909 2000 *3 : 24,240 m3/d 10 Spain Mallorca 69,300 2001 *3 : 23,100 m3/d 11 Spain Alicante 65,000 2002 expansion: 15,000m3/d (2006) 12 UAE Dubai 64,000 (2008) 13 Nambia Swakopumund 55,000 (2008) 14 Malta Ghar Lapsi, etc. 53,500 (2008) replacement for three places 15 Saudi Arabia KAUST 40,000 (2009) 15 Japan Okinawa 40,000 1997 *3 : 30,000 m3/d 17 Qatar The Pearl 35,000 (2008) 18 China Yuhuan 34,600 2006 *3 : 11,500 m3/d 19 Saudi Arabia Jeddah 32,000 (2009) 20 China Zhoushan Is. 31,850 2006 21 Oman Qarm Aram 25,000 (2008) 22 Spain Maspalomas-II 22,000 1994 *3 : 19,000 m3/d 22 Spain Adeje Arona 22,000 1997 24 Spain Bahia de Palma 21,000 1999 24 Spain Teneriffe 21,000 2002 26 India LANCO 16,500 (2009) 27 St. Marteen St. Marteen 15,000 2008 28 China Zhuanghe 12,700 (2008) 29 Netherlands Antilles Curacao 11,400 2000 30 Saudi Arabia Jeddah 10,000 (2009) 30 South Africa Mpumalanga 10,000 2008 30 Cyprus Famgusta 10,000 (2009) (Notes) *1 Total output of all units =Aquired projects for last 2 years. *2 The year in which the plant was commissioned, ( ) shows a project *3 Toray's initial installation Toray’s Cumulative Capacity for Seawater Desalination (Product Water Basis): 2,800,000 m3/day (Top Share in the World) 28 The Largest Seawater Desalination RO Plant in Africa (Hamma, Algeria)

Photo Credit: GE Water & Process Technologies

Seawater desalination plant constructed close to Alger, the capital city of Algeria. (Capacity : 200,000m3/day Online: Feb. 2008) 29 Largest Seawater Desalination RO Plant in Western Hemisphere (Point Lisas, Trinidad &Tobago)

Trinidad & Tobago, the Caribbean Sea, Seawater Desalination Plant (Capacity:136,000m3/d、Online: 2002) 30 Development of Low-fouling RO for Wastewater Reclamation

Results of Membrane Bio-fouling Assay Surface Bad (Orange County water district: Dr.Ridgway) (High Cross ) 0.14

o 600nm i attachment) t section a

r RO 0.12 疎水性微生物 F Mycobacteria /

B (hydrophobic(Mycobacteria) cell surface) (

0.10 t Flavobacteria親水性微生物 n o i e t (hydrophilic(Flavobacteria) cell surface) a m 0.08 Surface h R c

a F t

t 0.06 / Cross A

B l 600nm section a i

r 0.04 e

t Low-fouling RO c a 0.02 Good B Standard level (Low 0.00 (Cellulose Acetate Membrane) attachment) RO Low-fouling RO *Fouling : Deterioration of membrane performance caused by stains Toray has developed low-fouling RO membrane with extremely low bacteria attachment 31 Toray Acquires Large Scale Wastewater Reclamation Projects

Industrial water Wastewater Agricultural water Secondary effluent (was discharged) Indirect drinking water Sterilization

UF/MF membrane RO (reverse osmosis) membrane as of October 2008 p r t o e ro Country Location Capacity (m3/d) Operation YearNo. 1 Kuwait Sulaibiya 320,000 2005 2 Singapore Changi 228,000 (2009) 3 China Ningxia 78,000 (2008) 4 Australia Luggage Point 66,000 (2008) 5 China Tianjin TEDA 30,000 2006 6 China Dongguan 25,000 2005 7 Singapore Seletar 24,000 2004 8 China Tianjin Dongjiao 12,000 (2008) =Acquired Projects for Last 2 years

Toray’s Cumulative Capacity for Wastewater Reclamation (Product Water Basis): 1,000,000 m3/day (Top Share in the World)

32 WorldWorld’’ss LargestLargest WastewaterWastewater ReclamationReclamation PlantPlant :: SulaibiyaSulaibiya (Kuwait)(Kuwait)

Photo credit : GE-Ionics (USA) Using Toray’s low-fouling RO membranes Treated water is used for irrigation and industrial water. (Capacity: 320,000 m3/day, Online: 2005) 33 ProgressProgress ofof BrackishBrackish WaterWater RORO PerformancePerformance 99.9

99.8 Competitor’s attained level ) .

s d 1988 e

% 1987 1996 e 2006 ( 1999 s 99.5 m i n a t

e o r i 0 t c 1

c n i n e j j 99.0 a e h e t R

R t e ’s l

r 0 t a l o 8

S 9

a 98.0 m 1 S

’s 95.0 70 Operating Pressure decreased to 1/10 19 90.0 5.0 2.0 1.5 1.0 0.83.0 0.7 0.5 Medium Low Ultra Low Super Ultra Low

Operating Pressure normalized by Flux (MPa/( m3/m2///d)) Improvement of membrane materials and manufacturing technology realized the development of super ultra low pressure membrane with high salt rejection and lower operating pressure

WorldWorld’’ss most most advanced advanced MembraneMembrane forfor Energy-savingEnergy-saving 34 The Largest Brackish Water Desalination Plant in East Asia (Korea)

Brackish Water Desalination Plant for Petrochemical Industry (Capacity:84,000m3/day, Online: 1997) 35 Toray RO Membrane Elements Sales Volume by Usage

(Trend of Cumulative Shipping Volume) 【As of Nov. 2008】

(Unit: 10 thousand m3/d)

1800 e m

) 1600 u s l i

o 1400 s V a 1200 B g

r n

i 1000 e t p a p

i 800 W h

S 600

t e c 400 v u i t d

a 200 o l r u

P 0 ( m

u 95 96 97 98 99 00 01 02 03 04 05 06 07 (08)

C Expected Wastewater Seawater Desalination Pure Water Brackish Water Desalination

Total Shipping Volume:14,000,000 m3/d (Equivalent to water for 60,000,000 people)

36 New Products-1: 16-inch RO Elements 1. Advantages of 16-inch RO element Autowinding production realizes Stable element quality and Large membrane area These features will allow Lower Capex and Opex (abt. 15-20% down) and Smaller foot print (abt. 15% down).

2. Product line up Full line up of RO Membrane elements: Brackish Water Desalination: TM740-160 Low Fouling: TML40-160 16-inch element (left) and Seawater Desalination: TM840-160 conventional 8-inch element

37 New Products-2: Food and Beverage

Application Target at present is Dairy: Condensation of whey or milk protein In the future, will develop condensation of juice or other food & beverage application Market USA, New Zealand, and Europe

Membrane RO Started sales from last November Variation NF Will launch April 2009 PES-UF Will launch April 2009

Features Good protein rejection And excellent permeability (= difficult to clog)

Shape of elements 38 Summary of RO Membrane Market

MarketMarket by by (100 Million Yen) Market Growth (per Y) RegionRegion 800 29% 24% N. America 4% 600 21% Middle East 16% Europe 8% 400 Asia Pasific 8% 200 China 32% Japan 1% 0 Total 12% 2008 2009 2010 MarketMarket by by 2010 2010年度 ApplicationApplication 2008 かん水・海水淡水化 29% Brackish & Seawater 31% 下廃水再利用Wastewater Reuse 48% 8% 52% 超純水Ultra Pure Water 12% 11% その他Others 9%

AsiaAsia andand MiddleMiddle EastEast areare predictedpredicted toto expandexpand byby regionalregional factorsfactors whilewhile seawaterseawater // brackishbrackish waterwater desalinationdesalination andand wastewaterwastewater reusesreuses areare expectedexpected toto expandexpand byby application.application. TorayToray developsdevelops themthem byby GlobalGlobal SalesSales Team.Team.

39 Expansion Strategy of RO Membranes

 Expand business utilizing 20082008 high performance membrane – Seawater desalination application (high boron rejection membrane) – Wastewater reuse (low-fouling membrane) Toray  Strengthen marketing competitiveness 21% – Develop global marketing system – Strengthen engagement with major 2010 engineering-related companies 2010  Enlarge marketing area – Expand bases in USA, Europe, and Middle East – TBMC-based China Development  Strengthen cost competitiveness  Develop and commercialize new products Toray 29% 40 Contents:

1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

41 Wastewater Treatment: Conventional and MBR Method

Conventional Activated Sludge Method (ASM) Wastewater

Effluent

Aeration Tank Sedimentation Tank

MBR (Membrane Bioreactor) Process (+RO) IMS (Integrated Membrane System) Wastewater Effluent Membrane RO Module Reuse

Membrane Bioreactor Feature of MBR High Effluent Energy Small Process Maintenance concentration Quality Consumption Footprint Sludge ASM not good not good poor excellent poor

MBR excellent good good good excellent 42 TorayToray SubmergedSubmerged MembraneMembrane ModuleModule forfor MBR, ““MEMBRAYMEMBRAY”” SeriesSeries m m 8 0 6 , 1

515mm Standard Element “TSP-50150” (1.4 m2) “TMR140-100a” (100EL, 140m2)

43 Footprint Comparison: ASM v.s. MBR (capacity: each 5,000m3/d) 80m

Sedimentation Sedimentation Sedimentation

ASM m 5 Footprint: 4,400m2 5 Aerobic Aerobic Aerobic Tank Tank Tank

Anaerobic Anaerobic Footprint : 1/4 Tank Anaerobic Tank Tank A A A A A A e e e e e e r r r r r r M M M M M M o o o o o o m B B B B B B MBR b b b b b b Anaerobic 5 i i i i i i R R R R R R c c c c c c Footprint: 1,200m2 1 Tank Split Chamber Shared part such as pre-treatment and administration building is excluded. 44 MBR Membrane Module Manufacturers

A B C Toray Membrane Hollow Fiber Hollow Fiber Flat Sheet Flat Sheet Material PVDF PE PVDF PVC PVDF Pore Size 0.04 μm 0.4 μm 0.4 μm 0.08 μm Module TMR140- -- -- -- -- Type 200D Membrane 67 ㎡ 210 ㎡ 500 ㎡ 320 ㎡ 280 ㎡ Area Outside Not Not Required Required Cleaning Required Required

Module Configuration

45 MBR Flat Sheet vs Hollow Fiber Membrane

Membrane Type Sheet Hollow FiberFlat

Membrane & Module

Hollow Fiber (cross section) Flat Sheet Module Hollow Fiber Module - Effective clean up with scouring air - Large membrane area per footprint - Less pressure loss (Operate with - Backwash cleaning Merits gravity) - Higher flux - Easy maintenance - Small membrane area per footprint - Fouling with SS (Inter-fiber fouling) - Difficult to apply backwash - Frequent chemical cleaning (every Demerits week) - Small screen net size for pretreatment (1mm opening or smaller) 46 Filtration Principle of Flat Sheet MBR

Operation Image (Suction) Air Bubble Permeate Water Filtration Image

Permeate Activated Sludge manifold Permeate

Circulate Element Feed Water Flow (Air-lift) Module

Air Bubble

Blower Supporting Membrane Panel

Diffuser pipe Activated Sludge Tank 47 Design Concept of Membrane

Required Features of Membrane: - High Physical and Chemical Durability - Excellent Permeability - Low Fouling and Easy to Clean Flat Sheet Type: - Reinforced by Polyester Non-woven Fabric - Less Fouling and Easier to Clean than Hollow Fiber Type PVDF (Polyvinylidine DiFluoride) - Excellent Chemical PVDF Membrane Durability Non-woven Fabric 300 μm - Excellent Physical Strength Cross-section of Membrane 48 Membrane Surface Structure and Its Feature

Ideal Membrane Surface Structure: Item Toray Type B - Small Pore Size Average Pore Size - Narrow Pore Size Distribution [μm] 0.08 0.4 - Many Pores Pure Water Permeability 40 30 Hydrophilic Dry Membrane [10-9m3/m2/Pa/s] Membrane Surface Structure Realizes Excellent Permeability and Low Fouling

]

2 1.5 m / t i

n Toray PVDF u 2

1 1 0 1 [ 東レBF014

e Type B r o

P 0.5

f クボタ o

. o N 3.0 μm 0 0 0.2 0.4 0.6 0.8 3.0 μm Pore Size [micron meter] Toray PVDF Membrane Pore size Distribution on Surface Type B 49 Track Record Toray MBR Membrane Modules

Scotland, UK (Municipal, 1,975 m3/d)

Wales, UK (Municipal, 950 m3/d) Spain (Orange Juice, 1,000 m3/d) India (Textile, 11,200 m3/d) Netherlands ■ Recently Awarded Large Projects (Municipal, 2,400 m3/d) /d)Application Country Capacity (m3/d)Application Heenvliet Plant 6,500LCD WWChina 6,500LCD 38,000SewageUAE Cumulative Capacity :: 3 45,000SewageUAE 300,000 m3/d (130 plants) 30,000SewageKSA (as of Sept. 2008) 50 PilotPilot TestTest withwith MunicipalMunicipal WastewaterWastewater inin HollandHolland (sponsored(sponsored byby DutchDutch GovernmentGovernment ))

Pilot test started at Beverwijk WWTP in March 2003, cooperated with Seghers Keppel Technology Group (SKG).

Toray as Membrane Supply

SKG : MBR system design & plant operation

51 PilotPilot TestTest ResultsResults atat BeverwijkBeverwijk WWTPWWTP

70 60 50 Peak Flux (Rain weather) )

h 40 / 2

m Average Flux / 30 L

( (Fine weather)

x u

l 20 F 10 0 Toray B A Company Company

Toray’s Flux is twice as large as other companies’

52 Al-Ain Fast Track MBR Plant (UAE) Sewage Reuse for Irrigation, Operation started in Mar. 2008

- Capacity : 15,000 m3/d (5,000 m3/d x 3 plants) - Membrane Module : TMR140-200W x 72 units

Location MBR Plant Overview 53 Al-Ain Fast Track MBR Plant (UAE)

Anaerobic Aerobic MBR Raw Water Permeate Water Tank Tank Tank For Irrigation

Process Outline

Water Quality (design value) Influent Effluent 218mg/LTSS 1

5 231mg/LBOD 10

4-N 30mg/LNH 5 ≦1-NTUTurbidity

MBR Tank Design Picture

54 Heenvliet Hybrid MBR Plant (The Netherlands) Operation started in April 2006

- Model Plant EUROMBRA Project - Application : Sewage Treatment - MBR Capacity : 2,400 m3/d (Conventional Treatment : 7,000 m3/d ) - Membrane Elements : 3,000 pieces (4,200 m2) Hybrid of Conventional Method and MBR Aeration tank

MLSS = 4 NaOCl MBR Plant Overview g/l disinfection

clarifier

MBR

MLSS = 12 g/l Process Outline 55 Sales Volume of Submerged Membrane for MBR (Trend of Cumulative Shipping Volume ) As of April 2008 (Unit: 10 thousand m3/d)

e 35 m ) u s l i 30 o s V a

B g 25 r n i e t p a p

i 20 W h S

t e c 15 v u i t d a o l

r 10 u P ( m

u 5 C 0 03 04 05 06 07 (08)

MBR has rapidly increased its sales for waste water processing and reuse usage from 2006

56 Summary of MBR Market

MarketMarket by by RegionRegion (100 mil yen) Market Size and Toray's Share Market Growth Ratio 400 22% 14% N. America 15% 300 11% ME 25% 200 Europe 10% Asia/Oceania 10% 100 China 20% Japan 10% 0 Total 20% 2008 2009 2010 Annual Growth Ratio MarketMarket by by ApplicationApplication Recently sewage treatment by membrane exceeds 75% of MBR market. Remains are industrial usage for factory wastewater treatment system. ・・MBRMBR marketmarket isis growinggrowing moremore thanthan 20%20% annually.annually. ChinaChina andand MiddleMiddle EastEast areare mostmost increasingincreasing market.market. ・・WastewaterWastewater reclamationreclamation systemsystem (IMS)(IMS) projectsprojects withwith RORO areare increasingincreasing asas environment-consciousenvironment-conscious methodmethod forfor obtainingobtaining waterwater resource.resource. 57 Expansion Strategy of Submerged Membrane for MBR

20082008  Expand sales by utilizing high performance Toray 11% immersed membrane elements  Win orders of large wastewater treatment projects (size over 10,000 m3/day)  Strengthen marketability in Europe, USA, and the Middle East 20102010 TMEu for Europe and ME, and TMUS for USA Toray 22 %

 Increase production capability Will increase capacity to 1 million m3/d by 2009 (equivalent to treated water basis)

58 Contents:

1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

59 Toray PVDF Large Size Module - Type : HFM/HFS/HFU-2020 - FeaturesFeatures - Module Type : Pressured Type Filtrate Back Wash - Filtration Method : Outside to Inside - Membrane Area : 72 m2 Vent -Dimension : 216D x 2,160L [mm] Drain (The Largest Dimension and Membrane Area as 8-inch Module) HF Membrane AdvantagesAdvantages (PVDF) Casing - Stable Continuous Filtration (PVC) 3 2,160mm - High Filtration Flow : 110 – 260 m /d 216mm - High Chemical Resistance - High Physical Strength and High Integrity

Feed Drain Water Air 60 Comparison of Hollow Fiber Membrane Modules

B Company A B-1 B-2 C D Toray

Membrane Material PP・PVDF(MF) PVDF(MF) PES(UF) PVDF(MF) PVDF(MF/UF) Filtration P SS S P PPS S Mode Pore Size 0.04 0.02 0.10.1-0.010.10.04 0.010.01 (μm) Membrane 15 25.3 6736 57 25・50 7250 25 Area(m2)

Module Configuration

*P=Pressure Type S=Submerged Type

61 Design Concept of PVDF Hollow Fiber Membrane

1.Using chemically and mechanically durable PVDF as membrane material

2.Made with special spinning method (New-TIPS) which satisfies both high intensity and high permeability 3.The world’s first composite membrane that features low fouling characteristics. →Realizes the supply of secure and safe water with low cost Flow Direction

NIPS Low fouling layer TIPS Support layer New-TIPS (high flux & high Strength) 0 500 1,000 1,500 Composite membrane Strength (g/fiber)

-NIPS: Non-solvent Induced Phase Separation -TIPS: Thermally Induced Phase Separation

62 PVDF hollow fiber MF/UF membranes

M1 M2 M3

Pore size or MWCOMWCO* μm 0.05μm0.1 mm 150kDa (≒0.01μm) Pure water flux (m/h@100kPa) 0.81.62.4

Membrane Structure Asymmetrical (Composite membrane)Symmetrical Suitable Type Pretreated Water River & Lake Surface Water Clean Ground Water Feed water - Turbidity (NTU) ~0.05 0.05~30 5 ~100

*MWCO: Molecular Weight Cut Off

MostMost SuitableSuitable membranemembrane cancan bebe selectedselected toto meetmeet thethe feedfeed waterwater quality.quality.

63 Receiving the Society of Chemical Engineers Technology Award 2007

Toray received the Society of Chemical Engineers, Japan (SCEJ) Technology Award for developing water purification process using PVDF hollow fiber membrane modules. SCEJ selected Toray for this award because it rated highly Toray’s superior membrane technology in water purification process, its economic advantages, and its contributions to environmental protection offered by its water reclamation and reuse system.

64 PilotPilot TestTest CompetitionCompetition inin KoreaKorea (Drinking Water Production)

Competition for Full Scale Project AsahikaseiA ZenonB Toray ▼ ▼ Test Term : Mar – Aug 2005 200 AsahiA Chemical Participants: Toray, Company A, B 150 ) a

P CIP

k ZenonB CIP ( 100 Toray is selected P M ▼ as the most preferable supplier T 50 Most Stable Operation 0 Least Electricity Consumption 3/1 3/31 4/30 5/30 6/29 7/29 8/28 Highest Water Recovery Time (day) TMP: Trans Membrane Pressure Supplier Toray A B CIP: Cleaning In Place

Membrane Recovery Power consumption rate PVDF PVDF PVDF Material n

100 0.5 o i ) t p %

Nominal Pore size (

m

0.02 0.1 0.04 ) o 90 0.4 i u 3

(Micro-meter) t s a m r n /

o h Filtration Pressurize Pressurize Submerged y 80 0.3 r c

e W system r / Dead-end / Cross-flow / Suction v k e o (

c 70 0.2 w

2 e e o t Membrane area (m ) 50 31.672 r

p a r

r e c t i a

60 0.1 r t c W e Module - - l

50 0 E Toray AsahiA ZenonB 65 Track Record Toray PVDF Hollow Fiber Membrane Modules

Drinking Water HFM 2,700m3/d Cryptosporidium Pretreatment HFM 3,500m3/d Removal Boiler Water 3 for seawater Drinking water; Total: 13,000 m /d Production Plant desalination Cryptosporidium HFM 5,000m3/d in USA Removal 3 (9/2003 start) (7/2002 start) Total: 6,500 m /d (5/2003 start) HFS 3,300m3/d (2/2004 start)

HFM 8,000m3/d (8/2003 start)

HFS 3,200m3/d (6/2004 start) HFS 30,000m3/d Drinking water in Korea HFM 88,000m3/d (7/2009 start) Drinking water; Korea’ s Largest (3/2007 start) HFS 8,000m3/d HFS 19,000m3/d 3 HFS 8,640m /d Drinking water; Drinking water; Drinking water (10/2005 start) (1/2009 start) in Indonesia (12/2007 start) CumulativeCumulative Plants Plants Capacity: Capacity: Outside of Japan 300,000 m33/d (as of Sept. 2008) 300,000 m /d (as of Sept. 2008) Largest plant in Japan Including under construction 66 The Largest Membrane Treatment Plant in Japan (Kinuta Water Works)) 【Treatment Method】 Membrane Filtration Outline of the Plant 【Capacity】 Kinuta/Kinuta Shimo: each 40 km3/day (Total 80 km3 /day) 【Membrane Module】 MF Membrane for Drinking Water Membrane Filtration Drinking Kinuta Water Works Membrane Filtration Facility Raw Water Water

Membrane Operation started March 2007 Pressured Type Module Membrane Type MFMembrane H ollow Fiber MembraneShape of Membrane Hollow Fiber MembraneShape Water Tamagawa River-bed WaterRaw

P olyvinylidine DiFluorideMembrane Material Polyvinylidine DiFluorideMembrane 3 /day x2Treated Water 44,000m /day x2Treated mNominal Pore Size 0.1μmNominal Main System 3 train×2 Module 22 pcs/train Membrane Area/pc 75m2 Recovery 1train×2 Module 5pcs/train System Recovery 99.9% Ratio 67 New Products: Submerged PVDF Hollow Fiber Membrane Module (under development) 1. Target Application : Drinking Water Production, RO Pretreatment of Seawater Desalination, Tertiary Treatment of Waste Water, 2.Feature Industrial Water Treatment Module Type Submerged Type Conventional:Pressured Type

Filtrated P Raw Filtrated Water Water Water Hollow Fiber Product Membrane Figure

Raw Water Hollow Fiber Raw Tank Membrane Water Filtration Method Suction Pressured Low~High Turbidity Low~Middle Turbidity Raw Water (River Water~Activated Sludge Water) (River Water, Lake Water) Plant Size Lower Cost at Large Plant(little piping) Suitable for Small and Medium Size Listed Item Not applicable Applicable 68 Hollow Fiber UF/MF Membrane Modules Sales Volume

(Trend of Cumulative Shipping Volume ) As of April 2008 (Unit: 10 thousand m3/d)

e 35 m ) u s l

i 30 o s V a

B d 25 e r e d t r

a 20 a w W A

t 15 e c v u i t d 10 a o l r u P (

m 5 u

C 0 01 02 03 04 05 06 07 (08)

MF/UF Membrane modules is expanding its sales in drinking water usage since 2006

69 Summary of Hollow Fiber Membrane Market

MarketMarket by by (100 Million Yen) Market Growth Ratio RegionRegion Market Size and Toray's Share 500 N. America 15% 4% 6% 400 1% Europe/ME 15% 300 Asia/Oceania 32% China 30% 200 Japan 15% 100 Total 20% 0 Annual Growth Ratio Market by 2008 2009 2010 Market by 2010 ApplicationApplication 2008 2008年度 13% 10% Drinking上水 Water Wastewater下水再利用 Reuse 58% Pretreatment for 海淡前処理SWRO 15% 65% Industrial産業用途 20%

・・MainMain MarketMarket isis NN .America/Europe/ME..America/Europe/ME. China/Asia/AustraliaChina/Asia/Australia showsshows rapidrapid growthgrowth ・・IMSIMS demanddemand isis takingtaking offoff suchsuch asas pretreatmentpretreatment ofof SWROSWRO andand WastewaterWastewater reusereuse 70 Expansion Strategy of UF/MF Hollow Fiber Membrane

 Expand sales by utilizing high performance membranes 20082008 Toray 1% Since our pressured type is the listed items of the international export control regimes, it takes time to export.  Enlarge marketing area – North America, Middle East, China – Wastewater reuse, industrial water, 20102010 large size seawater pretreatment  Sales expansion in Japan and East Asia – Cooperation with Suido Kiko and Japanese engineering companies – Involvement in East Asia development project of drinking water treatment technologies Toray 6%  Increase production capacity  Commercialization of new product 71 Contents:

1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

72 IMS (Integrated Membrane System)

Since Toray has all variation of membranes developed by own technology, Toray can provide the most suitable water treatment membrane system, and can realize the highest performance and cost reduction.

A ctual Plant Typical Process Flow Actual Plant Seawater MF SWRO BWRO -Seto Inland Sea/Japan desalination (1,600m3/d:2004) (SWRO) -Dubai/UAE(64,000m3/d:2008) Pretreatment Desalination Boron Removal Wastewater MF RO -Seletar/Singapore(24,000m3/d:2004) nd reclamation 2 -Sulaibiya/Kuwait(320,000m3/d:2005) Effluent 3 (WWRO) Pretreatment Reclamation -Changi/Singapore (228,000m /d:2009) Wastewater MBR RO -Fuji Film/The Netherlands (1,080m3/d:2005) Biological Reclamation -Tirupur Textile/India(11,200m3/d:2008) Treatment MF/UF MF/UF Water -Kinuta/Japan (80,000m3/d:2007)

Purification Primary Recovery 73 Track Record of IMS

TorayToray hashas suppliedsupplied membranesmembranes forfor 2121 IMSIMS plantsplants inin thethe world,world, andand its its totaltotal capacitycapacity exceedsexceeds 1.000,000m3/d.1.000,000m3/d. 1010 plantsplants ofof 2121 IMSIMS plantsplants adoptedadopted Toray’sToray’s membranesmembranes forfor allall membranemembrane processprocess inin thethe IMSIMS plant..plant..

=UF/MF+RO(Toray+Toray) =UF/MF+RO(Toray+Others) =MBR+RO(Toray+Toray) =MBR+RO(Toray+Others) =UF/MF+UF/MF(Toray+Toray) 74 SWRO Plant (IMS Case 1)

Seto Inland Sea (Ehime Prefecture, Japan) MF SWRO Brine Conversion 2-stage Membrane 100 Seawater Desalination 40 Seawater 60 High Pressure RO Product 60 20 Water

Figure=Flow Ratio Energy Recovery Effluent

MF Pretreatment Unit SWRO Unit (1600 m3/d) (3,000 m3/d)

75 Tirupur Textile WW Reuse Project (India) (IMS Case 2) (Under construction)

- Industrial WW Reuse - Product Water Output: 9,000m3/d - Membrane Module : TMR140-100S x 128 units (MBR Capacity:11,200m3/d) - RO Elements: TML20-400 x 600pcs Plant Overview Raw Water

Equalization Chemical MBR Ion Sand RO Tank Oxidation Exchange Filter for removing Safety Permeate Color & COD Barrier Water Process Outline for Reuse 76 Contents:

1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business

77 Business Plan of Toray’s Water Treatment Business

Over Sales 100.0 (Billion yen)

100 Systems Business 80 67.0

60

47.0 Membranes 40 35.0

20

0 2006 2008 2010 2015 year TargetTarget -- Over Over 100100 BillionBillion YenYen SalesSales AmountAmount andand 1010 BillionBillion YenYen SalesSales ProfitProfit inin 20152015 78 Toray Receives 2008 Humanitarian Award from the United Nations Association of New York TheThe 2008 2008 Humanitarian Humanitarian Award Award was was in in recognition recognition for for Toray’s Toray’s environmentally environmentally friendly friendly businessbusiness activities activities and and CSR CSR activities activities targeting targeting climate climate change change prevention prevention and and sustainablesustainable social social growth. growth. Humanitarian Award from the United Nations Association of New York (UNA-NY) Each year the UNA-NY presents Humanitarian Awards to corporations, individuals and organizations that have made significant contributions in specific fields. The theme for each year’s awards is based on one of the eight Millennium Development Goals adopted at the United Nations Millennium Summit in 2000. Past recipients include UNICEF and the GE foundation. The theme of 2008 was “Environment and Climate Change”. The other recipients this year were UN Secretary- General Mr. Ban Ki-moon, and Mr. Olafur Ragnar Grimsson, President of the Republic of Iceland. Background for winning the award In recognition for Toray’s environmentally friendly business activities such as Water treatment business and carbon fiber composite materials for reducing global heating gas, as well as for CSR activities such as energy saving measures and betterment of workplace.

President Sakakibara with UN Secretary- General Ban Ki-moon, who was also an award recipient Toray is committed towards fulfilling the role expected of it by the society, striving for the development of a recycle-oriented society that enables sustainable growth by exploiting cutting-edge technology and backed by the “power of chemistry”. 79 Descriptions of predicted business results, projections, and business plans contained in this material are based on predictive forecasts of the future business environment made at the present time. The material in this presentation is not a guarantee of the Company’s future business performance.

80 81