Please allow me to take this opportunity to express my most sincere gratitude for your continued support. I would like to hereby provide you with the overview of our interim term (from April 1, 2011, to September 30, 2011) for the 140^th fiscal year.

The domestic economy during this interim term has steadily picked up from the slump after the Great East Japan Earthquake in light of the recovery in the supply chain and improvement in corporate sentiment. However, concerns over an economic downturn due to the prolonged appreciation of the yen and the slowdown in overseas economies have kept the outlook uncertain.

In the chemical industry, the environment remained harsh with unstable petrochemical prices as concerns continued to loom over the lack of supply of natural fat and oil materials.

In such an environment, our company group has strived to secure profit by adjusting product prices to appropriate levels and lowering manufacturing costs, as well as through a company-wide effort to reduce various expenses.

However, domestic demand stagnated from the middle of this interim period causing sales volume to decline, and the higher yen lowered our profitability from exports, leading to insufficient results in our income. As a result, group revenue for the interim term increased 2.3% from the same period a year ago to 14.67 billion yen while operating profit rose 64.4% year-over-year to 394 million yen, current profit increased 47.6% from the same period a year ago to 486 million yen, and interim net income jumped to 402 million yen, or 2.43 times of the year-ago period.

As for the interim dividend, I very much regret to inform you that we must forgo payment as was the case in the previous year. We ask for your kind understanding on this matter.

December 2011

Mantaro Fujimoto President
New Japan Chemical Co., Ltd.