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                  29
     Business Sector Highlights



      FY2011                                  Major Products                                 Net Sales                             Operating Income*2


      Basic Chemicals                         • Acrylonitrile • Caprolactam                                 15%
                                                                                                           15%                                  11%
                                                                                                                                               11%                   1
                                              • Aniline • Methanol
                                              • Methyl methacrylate monomer and polymer
                                              • Nitric acid • Caustic soda
                                              • Aluminum hydroxide       • Alumina
                                                                                                  ¥284.3 billion
                                                                                                 ¥284.3 billion                        ¥9.3 billion
                                                                                                                                      ¥9.3 billion          ¥302.4
                                                                                                                                                           ¥302.4 b
                                              • High-purity aluminum      • Aluminum                (-¥17.9 billion
                                                                                                 (-¥17.9 billion) )                     (-¥11.3 billion
                                                                                                                                     (-¥11.3 billion) )      (+¥17.9
                                                                                                                                                           (+¥17.9 bi
                                              • Resorcinol     • Polymer additives
                                              • Organic rubber chemicals      • Dyestuffs
                                              • Ethylene-vinylacetate copolymer emulsions
                                page 34


      Petrochemicals & Plastics               • Ethylene • Propylene                                        34%
                                                                                                           34%                                   8%
                                                                                                                                                8%                    2
                                              • Styrene monomer • Propylene oxide
                                              • Polyethylene • Polypropylene
                                              • Ethylene-vinyl acetate copolymer
                                              • Thermoplastic elastomer
                                                                                                  ¥672.4 billion
                                                                                                 ¥672.4 billion                        ¥6.2 billion
                                                                                                                                      ¥6.2 billion          ¥554.4
                                                                                                                                                           ¥554.4 b
                                                                                                   (+¥22.5 billion
                                                                                                 (+¥22.5 billion) )                     (-¥5.0 billion
                                                                                                                                     (-¥5.0 billion) )         (-¥0.9 b
                                                                                                                                                            (-¥0.9 billi
                                              • Ethylene-propylene rubber
                                              • Acrylonitrile butadiene styrene copolymer
                                              • Agricultural films
                                              • Polypropylene sheets
                                page 36


      IT-related Chemicals                    • Optical functional films                                    15%
                                                                                                           15%                                  13%
                                                                                                                                               13%                    1
                                              • Color filters
                                              • Color resist
                                              • Light-guide plates • Photoresists
                                                                                                  ¥293.1 billion
                                                                                                 ¥293.1 billion                       ¥11.0 billion
                                                                                                                                     ¥11.0 billion          ¥265.0
                                                                                                                                                           ¥265.0 b
                                              • High-purity chemicals
                                                                                                    (-¥29.2 billion
                                                                                                 (-¥29.2 billion) )                     (-¥15.2 billion
                                                                                                                                     (-¥15.2 billion) )      (+¥16.0
                                                                                                                                                           (+¥16.0 bi
                                              • Sputtering targets
                                              • Super engineering plastics
                                              • MOEPI wafers • Metal organics

                                page 38


      Health & Crop Sciences                  • Crop protection products                                    14%
                                                                                                           14%                                  33%
                                                                                                                                               33%                    1
                                                (insecticides, fungicides, herbicides and
                                                plant growth regulators)
                                              • Household insecticides
                                              • Public hygiene insecticides                       ¥264.1 billion
                                                                                                 ¥264.1 billion                       ¥26.5 billion
                                                                                                                                     ¥26.5 billion          ¥330.0
                                                                                                                                                           ¥330.0 b
                                              • Long-lasting insecticidal nets                     (+¥13.3 billion
                                                                                                 (+¥13.3 billion) )                    (+¥3.2 billion
                                                                                                                                     (+¥3.2 billion) )        (-¥28.7
                                                                                                                                                           (-¥28.7 bil
                                              • Animal health products
                                              • Feed additives • Fertilizers
                                              • Active pharmaceutical ingredients
                                page 40       • Pharmaceutical intermediates



      Pharmaceuticals                         • Ethical pharmaceuticals                                     19%
                                                                                                           19%                                  26%
                                                                                                                                               26%                    2
                                              • Radiopharmaceuticals
                                              • Radiation therapy equipment

                                                                                                  ¥380.5 billion
                                                                                                 ¥380.5 billion                       ¥20.9 billion
                                                                                                                                     ¥20.9 billion          ¥626.6
                                                                                                                                                           ¥626.6 b
                                                                                                    (-¥30.1 billion
                                                                                                 (-¥30.1 billion) )                     (-¥7.7 billion
                                                                                                                                     (-¥7.7 billion) )        (-¥30.1
                                                                                                                                                           (-¥30.1 bil




                                page 42

     *1 Figures in parentheses show changes from FY2010.
     *2 Ratio of each segment’s operating income to total operating income before eliminating income from intersegment transactions and incurring shared
        company-wide expenses.




30   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                             Business Sector Highlights




     Assets                                           Major Factors for Change in Net Sales                    Major Factors for Change in Operating Income



1%                13%
                                                      ■   Decrease in shipping volume for methyl
                                                          methacrylate (MMA) and specialty                     ■   Decrease in shipping volumes and lower
                                                          chemicals due to weak demand                             margins for methyl methacrylate (MMA)
        ¥302.4 billion                                                                                             and specialty chemicals
n)      (+¥17.9 billion)                              ■   Decrease in shipping volume for
                                                          caprolactam due to weakened demand                   ■   Decrease in shipping volumes for
                                                          and the impact of the earthquake                         caprolactam




%                  24%
                                                                                                               ■   Decrease in shipping volumes due
                                                      ■   Higher market prices for petrochemical
                                                                                                                   to decline in demand and periodical
                                                          products in Asia due to rise in feedstock
                                                                                                                   maintenance shutdowns of manufactur-
        ¥554.4 billion                                    prices
                                                                                                                   ing plants*
)        (-¥0.9 billion)                              ■   Rise in selling prices for petrochemical
                                                                                                               * In fiscal 2011, periodical maintenance
                                                          products in Japan due to increase in
                                                                                                                 was carried out at plants in Japan,
                                                          naphtha prices
                                                                                                                 Singapore and Saudi Arabia.




3%                 11%


n       ¥265.0 billion                                ■   Fall in selling prices for polarizing films          ■   Fall in prices for polarizing films
n)      (+¥16.0 billion)                                  due to sluggish demand                               ■   Stronger yen




3%                 14%


n       ¥330.0 billion                                ■   Increase in shipping volumes of agro-                ■   Increase in shipping volumes of agro-
n)      (-¥28.7 billion)                                  chemicals and methionine                                 chemicals and methionine




6%                 27%
                                                                                                               ■   Lack of one-time items, such as the
                                                      ■   Lack of one-time items, such as the
                                                                                                                   previous fiscal year’s income from an
                                                          previous fiscal year’s income from an
                                                                                                                   upfront payment associated with a
        ¥626.6 billion                                    upfront payment associated with a
n                                                                                                                  development and commercialization
)       (-¥30.1 billion)                                  development and commercialization
                                                                                                                   agreement
                                                          agreement
                                                                                                               ■   Increase in sales promotion cost for
                                                      ■   Stronger yen
                                                                                                                   LATUDA®



     *3 Change in Reported Segments Classification Methods
        As of April 1, 2011, the Fine Chemicals Segment was eliminated, and functional materials, additives, and dyes that had been included in this segment were
        transferred to the Basic Chemicals Segment. In addition, pharmaceutical chemicals, which had also been included in this segment, were transferred to the
        Agricultural Chemicals Segment. Following this change, the Agricultural Chemicals Segment changed its name to the Health & Crop Sciences Segment.
        The businesses of consolidated subsidiaries in the Pharmaceuticals Segment that had been included in the Others Segment were transferred to the
        Pharmaceuticals Segment. For the purpose of comparison, the figures for fiscal 2010 have also been adjusted to reflect these accounting changes.



                                                                                                 Sumitomo Chemical Company, Limited ◆ Annual Report 2012            31
                                                      ’03/3            ’04/3            ’05/3            ’06/3           ’07/3            ’08/3            ’09/3

                                                       FY2001–FY2003                            FY2004–FY2006                                    FY2007–FY2009
                                                    Corporate Business Plan                  Corporate Business Plan                          Corporate Business Plan
     Net sales
     ■ Basic Chemicals                              ¥ 194.4          ¥ 199.1          ¥ 225.8         ¥ 252.4          ¥ 314.0          ¥ 314.7         ¥ 240.0
     ■ Petrochemicals & Plastics                        371.6           362.4            412.6            486.1            539.1           603.3            553.0
     ■ Fine Chemicals                                    83.9             80.6            84.1             79.0             90.9             92.9            80.8
     ■ IT-related Chemicals                              82.5           123.5            174.8            229.2            266.4           297.5            307.1
     ■ Health & Crop Sciences                           158.7           167.1            171.6            186.2            198.3           200.4            222.2
     ■ Pharmaceuticals                                  168.4           166.6            170.7            233.1            234.5           237.6            235.6
     ■ Others                                            51.6             59.2             56.8            90.6            146.8           150.1            149.5
     Total                                            1,111.1         1,158.4          1,296.3          1,556.6         1,790.0          1,896.5          1,788.2

     Operating income (loss)
     ■ Basic Chemicals                                    5.7              2.6              5.2            10.0             13.5             10.6            (15.3)
     ■ Petrochemicals & Plastics                           5.0             (1.6)           15.0            17.9             23.6              4.5            (30.3)
     ■ Fine Chemicals                                      9.3             8.8             11.5              9.8            13.1             11.4              1.6
     ■ IT-related Chemicals                                0.5            14.3             18.7            21.7              3.5              6.3             (1.0)
     ■ Health & Crop Sciences                            16.7             10.7             14.8            16.6             23.3             20.9             24.4
     ■ Pharmaceuticals                                   32.3             27.8             34.4            38.3             56.2             46.5             32.4
     ■ Others                                              4.2             4.9              5.7              5.8             8.0              3.7             (7.9)
     Elimination                                          (0.2)            (0.9)           (0.3)             0.7             (1.5)            (1.5)           (1.7)
     Total                                               73.5             66.6           105.2            120.8            139.6           102.4               2.1

      Capital expenditures
     ■ Basic Chemicals                                   19.6             13.3             18.2            20.7             24.6             27.6             14.7
     ■ Petrochemicals & Plastics                         26.1             11.7             13.7            16.1             16.9             21.2             17.6
     ■ Fine Chemicals                                      6.7             7.0              7.5              7.0              4.6             6.9              7.7
     ■ IT-related Chemicals                              29.8             37.2             40.2            44.0             72.0             33.4             50.6
     ■ Health & Crop Sciences                            26.5              5.7             18.0              8.8            10.1              8.5             11.3
     ■ Pharmaceuticals                                   13.5             21.7             19.1            10.6             12.5             18.3             12.7
     ■ Others                                            29.7             13.7              9.0            17.7             19.1             26.7             19.6
     Total                                              152.0            110.2           125.8            124.9            159.8            142.5           134.1

      Research and development expenses
     ■ Basic Chemicals                                     2.8             4.6              5.1              5.3              5.7             6.1              6.4
     ■ Petrochemicals & Plastics                           7.8            11.0             10.9            11.4             11.3             11.1             12.0
     ■ Fine Chemicals                                      5.3             4.0              4.4              4.4              4.2             4.1              4.2
     ■ IT-related Chemicals                                6.3             7.7              9.7            12.8             12.6             13.7             21.2
     ■ Health & Crop Sciences                            13.1             17.9             18.6             19.4            18.7             19.4            20.7
     ■ Pharmaceuticals                                   28.1             28.3            28.1             36.7             42.5             47.7            55.0
     ■ Others                                             9.3              1.7              1.4              1.9             2.6              3.3            11.6
     Total                                               72.8             75.2            78.2             91.9             97.7           105.4            131.1
     *1 US dollar amounts are translated from yen, for reference only, at ¥82.19 = $1, the prevailing rate on March 31, 2012.
     *2 The Company has been applying the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information (ASBJ Statement No. 17
        of March 27, 2009) and the Implementation Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information (ASBJ
        Guidance No. 20 of March 21, 2008) from fiscal 2010. Along with this, the method for allocating shared company-wide research expenses and other expenses has
        been revised, and the business segment categorization of consolidated subsidiaries has been changed. For the purpose of comparison, the figures for fiscal 2009
        in this report have also been adjusted to reflect these accounting changes.




32   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                      Business Sector Highlights




                                             Thousands of      Sales by Sector
                           Billions of yen    US dollars*1

 ’10/3       ’11/3             ’12/3               ’12/3       ■ Basic Chemicals ■ Petrochemicals & Plastics ■ Fine
                                                               Chemicals ■ IT-related Chemicals ■ Agricultural Chemicals/
                                                               Health & Crop Sciences ■ Pharmaceuticals ■ Others
                           FY2010–FY2012
                        Corporate Business Plan
                                                                                               Others 5%
                                                               2001/3                               5%
¥ 203.3     ¥ 302.3          ¥ 284.3         $ 3,459,642                                                              18%
                                                                                         15%
  481.5       649.9             672.4             8,181,384                     Fine                                         Bulk
                                                                            chemicals                                        chemicals
   86.7          —                  —                      —
                                                                                 41%                                         54%
  265.2       322.3             293.1             3,565,714                                          Net sales
                                                                                 11%               ¥1,041 billion
  211.5       250.8             264.1             3,213,700                                                                 36%
  267.5       410.6             380.5             4,629,736                             6%
  105.1        46.6               53.4             649,593                                     9%
 1,620.9     1,982.4          1,947.9         23,699,769
                                                                                               Others 5%
                                                               2004/3                               5%
     1.3       20.6                9.3             113,749                                                            17%
                                                                                         14%
    (0.2)      11.1                6.2              74,887                      Fine                                        Bulk
                                                                            chemicals                                       chemicals
     3.6         —                  —                      —
                                                                                 46%                 Net sales              49%
     6.3       26.1               11.0             133,447
                                                                                 14%               ¥1,158 billion
   29.3        23.3               26.5             322,363                                                                  32%
   29.9        28.7               20.9             254,508
     6.7         4.1                7.7             93,929                                   11%

   (25.4)      (26.0)            (20.9)            (254,496)                                              7%

   51.5        88.0               60.7             738,387                                     Others 8%
                                                               2007/3
                                                                                                   8%
                                                                                                                      18%
   12.4        16.6               24.5             298,211                              13%
                                                                                Fine                                         Bulk
    14.4        13.7              19.6             238,277                  chemicals                                        chemicals
                                                                                 44%                                         48%
    17.8         —                  —                      —                                         Net sales
                                                                                 11%               ¥1,790 billion
    11.5        27.7              66.9             813,724                                                                   30%

    23.2        15.6              19.3             234,603
     7.8        10.5              11.3             137,973                                   15%
    16.3        14.6              13.5             164,022                                                 5%

  103.2         98.7             155.1            1,886,811                                   Others 8%
                                                               2010/3                              8%                13%

     3.5         5.1                5.2              62,879                             16%
                                                                                                                             Bulk
                                                                                Fine                                         chemicals
     8.3         7.6                7.2              87,407                 chemicals
                                                                                                                             43%
     4.2         —                   —                     —                     49%                 Net sales
                                                                                                   ¥1,621 billion
    11.0        11.6              11.7             141,879                        13%
                                                                                                                             30%

   17.2        21.6               19.7             239,993
   54.9        71.2               59.0             718,214
                                                                                                    16%         4%
   18.1        21.1               19.5             237,231
  117.3       138.1             122.3             1,487,602                                        Others 3%
                                                               2012/3                                    3%
                                                                                                                     15%
                                                                                        19%
                                                                                                                             Bulk
                                                                                Fine                                         chemicals
                                                                            chemicals                                        49%
                                                                                 48%                  Net sales
                                                                                                   ¥1,948 billion
                                                                                  14%                                        34%



                                                                                               15%




                                                                  Sumitomo Chemical Company, Limited ◆ Annual Report 2012                  33
                   Basic Chemicals

                                     Sales                             Operating Income                 Operating Margin
           FY2011
         Performance                                           -5.9%                     -54.7%                        -3.5 points

                                     ¥284.3 billion                    ¥9.3 billion                    3.3 %

     We have positioned methyl methacrylate (MMA), caprolactam and inorganic materials as the
     core businesses of the Basic Chemicals Sector. We are working to strengthen the profitability
     of these businesses and continue expanding them globally with a focus on Asia, where
     demand growth remains high.




     Z MMA Business                                                    Z Inorganic Materials Business
     MMA polymer, which offers outstanding transparency                We provide distinctive high-performance inorganic
     and weather resistance, is an excellent material for a            materials using our advanced technologies for precisely
     broad range of uses, such as in light-guide plates for LED        controlling such physical properties as purity, particle size
     televisions and other optical components, automotive              and form.
     applications, showcases, and outdoor signboards. With the              Sumitomo Chemical is the world’s leading manufacturer
     economic expansion in Asian countries, particularly China         of high-purity alumina. In recent years, our alumina
     and India, demand in Asia for MMA polymer is expected             products have enjoyed increasing demand for use in new
     to grow at an annual rate of over 10% from the current            applications, such as sapphire substrate glass for LEDs,
     650,000 tons per year.                                            lithium-ion battery materials and high thermal conductive
         As Asia’s leading MMA producer, we continue to                fillers.
     enhance the competitiveness of our entire MMA product                  A new production line for high-purity alumina was
     chain, from monomer and polymer to finished sheets. We            completed in July 2012, expanding our annual production
     produce monomer and polymer in Singapore, Japan and               capacity to 3,200 tons. We are still considering further
     South Korea with a combined annual production capacity            expanding our production capacity.
     of 489,000 tons for monomer and 263,000 tons for polymer.              We also manufacture and sell fine alumina for liquid
     Anticipating that MMA polymer demand will expand, we              crystal displays (LCDs) and solar cell glass substrates,
     completed our new MMA polymer plant in Singapore in the           as well as aluminum hydroxide for artificial marble and
     third quarter of 2012. The plant will have an annual produc-      halogen-free flame-retardants.
     tion capacity of 50,000 tons.                                          We are also focusing on the development of a
                                                                       diesel particulate filter (DPF) for diesel engine passenger
     Z Caprolactam Business                                            vehicles, for which demand is expected to grow with the
     Caprolactam is a raw material for nylon 6, which is used in       tightening of exhaust gas emissions regulations in Europe.
     synthetic fibers, films and engineering plastics. Demand for      Our aluminum titanate DPF is superior to existing silicon
     nylon 6 in Asia, particularly China, is extremely strong for      carbide DPFs in terms of pressure loss, soot mass limit and
     applications in clothing, engineering plastics and tire cords,    thermal shock resistance, which are essential properties
     and demand for caprolactam in the region is expected to           for DPFs. We have already started supplying samples of
     grow at an annual rate of 4% from the current 2 million tons      our aluminum titanate DPF to automakers. We plan to
     per year.                                                         commence commercial production in 2014, when DPFs
         We produce caprolactam using the conventional                 are expected to become widely used on diesel-powered
     liquid-phase process as well as our proprietary energy- and       passenger vehicles in Europe.
     resource-efficient vapor-phase process. Our product is
     recommended as the most suitable for high-speed spin-
     ning and is highly valued by our customers together with
     our strong distribution network.


34   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                                                                            Basic Chemicals




            Aquarium made of MMA                                     MMA plant in Singapore                                   Caprolactam for nylon 6           Electronic components made of
                                                                                                                                                                           high-purity aluminum




Corporate Business Plan FY2010 – FY2012


Basic Policy                                                                                  Priority Initiatives

Reform business structure, strengthen profitability,                                           1     Strengthen core businesses
and build the foundation for future growth                                                     2 Accelerate R&D and commercialization of new products and
                                                                                                 technologies
                                                                                               3 Implement measures for improving profitability and streamlining of
                                                                                                 existing businesses
                                                                                               4 Implement effective pricing to quickly meet the fluctuations
                                                                                                 in raw material prices
Sales & Operating Income (Loss)

  (Billions of yen)                                                                                                                                                                     (Billions of yen)
                                                                                                                                            20.6
         400          ■■■ Sales (left axis)              Operating income (loss) (right axis)                                                                                                20

                                                                        314.0                314.7                                           302.3                             310.0
         300                                                                                                                                                   284.3                         15
                                                         252.4              13.5
                                         225.8                                                              240.0
         200          199.1                                                                        10.6                       203.3                               9.3                        10
                                                              10.0                                                                                                                 9.0
                                            5.2
         100                                                                                                                                                                                 5
                            2.6

             0                                                                                                                        1.3                                                    0


                                                                                                                  -15.3                                                                      -20

                      FY2003         FY2004              FY2005        FY2006                FY2007        FY2008             FY2009        FY2010         FY2011          FY2012
                                                                                                                                                                           (Forecast)



                               Corporate Business Plan FY2004 – FY2006                      Corporate Business Plan FY2007 – FY2009            Corporate Business Plan FY2010 – FY2012
    Priority
   Initiatives                 Expanded MMA and                                                                                                Strengthen core businesses:
                                                                                            Expanded MMA production capacity
                               caprolactam production capacity                                                                                 MMA, caprolactam, inorganic materials




Operating Income before Depreciation                                    Total Assets & ROA                                                    Asset Turnover
& Capital Expenditures
(Billions of yen)                                                       (Billions of yen)                                       (%)           (Times)
  50                                                                     500                                    9.7             10             1.5

                                     41.9                                400                                                    8                       1.23
  40                                                                                                                                                                            1.13
                                                                                                                                                                1.05
                                                                         300                                    284.5 302.4     6              1.0                      0.97              0.97
  30      23.9                                   23.6                            257.1
             27.6                                 24.5                   200                 200.2 218.2                        4
  20                                                                            4.1                                   3.2
                              15.5                                       100                                                    2              0.5
                 14.7                      16.6
  10                              12.4                                                                    0.6
                                                                            0                                                   0
                      1.9                                                                   -6.7
    0                                                                                                                           -8                 0
          ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                           ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                         ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
■■ Operating income before depreciation                                 ■■ Total assets (left axis)
   Capital expenditures                                                    ROA (right axis)




                                                                                                                            Sumitomo Chemical Company, Limited ◆ Annual Report 2012                         35
                   Petrochemicals & Plastics

                                     Sales                          Operating Income               Operating Margin
           FY2011
         Performance                                       +3.5%                     -44.7%                      -0.8 points

                                     ¥672.4 billion                 ¥6.2 billion                   0.9 %

     We have positioned polyethylene (PE), polypropylene (PP) and propylene oxide (PO) as
     the core businesses of the Petrochemicals & Plastics Sector. We are working to expand our
     business and strengthen profitability by further globalizing and shifting toward higher value-
     added applications.




     Z Polyethylene Business
     Global PE demand is estimated at 63 million tons per
                                                                      Rabigh Project
     year, and is expected to grow at an annual rate of 3%. We        We and Saudi Arabian Oil Company (Saudi Aramco),
     operate PE manufacturing facilities in Japan, Singapore          the world’s largest oil company, each have a
     and Saudi Arabia with a combined production capacity of          37.5% stake in Rabigh Refining and Petrochemical
     1.5 million tons per year. With the aim of further enhancing     Company (Petro Rabigh), and support the operation
     the profitability of our PE business, we are stepping up         of Petro Rabigh’s world-scale integrated oil refinery
     marketing efforts for ethylene vinyl acetate copolymer as        and petrochemical complex. The complex utilizes
     an encapsulating material for photovoltaic cells, which          400,000 barrels per day of crude oil and 1.2 million
     are expected to achieve high growth. We are also actively        tons per year of ethane as primary feedstocks to
     working to expand our low-density polyethylene business          produce a variety of refined petroleum products and
     in the area of high value-added applications, such as            petrochemical products. Through the full integration
     waterproof laminates for paper.                                  of its oil refining and petrochemical operations,
                                                                      this complex takes full advantage of outstanding
     Z Polypropylene Business                                         operational efficiency and significant economies of
     Global PP demand is estimated at 43 million tons per             scale, and also utilizes the highly cost-competitive
     year and is expected to grow at an annual rate of 4%. We         ethane as a primary feedstock.
     operate PP manufacturing facilities in Japan, Singapore
     and Saudi Arabia with a combined production capacity of
     1.65 million tons per year. We are redoubling our efforts
     to strengthen our high value-added PP business globally
     for products such as PP compounds for use in automotive
     components, high-quality film materials for electronics
     components, and film materials for food packaging.

     Z Propylene Oxide Business
     PO is used mainly as a raw material for polyurethanes.
     Global PO demand is estimated at 6.8 million tons per
     year, and is expected to grow at an annual rate of 6%. We
     operate PO manufacturing facilities in Japan and Saudi
     Arabia with a combined production capacity of 580 thou-
     sand tons per year. We will continue our efforts to further
     consolidate our position as the top PO supplier in Asia.




36   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                                                             Petrochemicals & Plastics




                       Rabigh complex                         Automotive component                                     Propylene oxide plant                Products made of polyethylene
                                                              made of polypropylene




Corporate Business Plan FY2010 – FY2012


Basic Policy                                                                              Priority Initiatives

Achieve sustainable profitability                                                          1      Establish global operations
by establishing global operations                                                                 · Establish worldwide marketing operations built on globally
                                                                                                    standardized products
                                                                                                  · Achieve sustained profitability of Petro Rabigh
                                                                                           2      Strengthen the profitability of operations in Japan
                                                                                           3      Accelerate R&D to further enhance high value-added businesses

Sales & Operating Income (Loss)

  (Billions of yen)                                                                                                                                                                    (Billions of yen)
                      ■■■ Sales (left axis)          Operating income (loss) (right axis)                                                                                  830.0
         800                                                                                                                                                                                40

                                                                                                                                      649.9               672.4
         600                                                                              603.3                                                                                             30
                                                                   539.1                                    553.0
                                                     486.1                                                               481.5
                                     412.6                             23.6
         400          362.4                                                                                                                                                                 20
                                                         17.9
         200                                15.0                                                                                          11.1                                              10
                                                                                                                                                             6.2                11.0
                                                                                               4.5
             0                                                                                                                                                                              0

                       -1.6                                                                                                 -0.2
                                                                                                            -30.3
                                                                                                                                                                                            -40

                      FY2003         FY2004          FY2005       FY2006                 FY2007             FY2008       FY2009      FY2010           FY2011              FY2012
                                                                                                                                                                          (Forecast)



                               Corporate Business Plan FY2004 – FY2006                  Corporate Business Plan FY2007 – FY2009           Corporate Business Plan FY2010 – FY2012
    Priority
   Initiatives                 Expanded PO production, plant renovation                                                                   Strengthen profitability of existing businesses
                                                                                        Rabigh Phase I Project
                               for shift to higher value-added products                                                                   by establishing global business capabilities




Operating Income before Depreciation                               Total Assets & ROA                                                   Asset Turnover
& Capital Expenditures
(Billions of yen)                                                   (Billions of yen)                                      (%)           (Times)
  50                                                                600      591.2                                         6             1.5
                                                                                                   549.7 555.3 554.4
                                                                                          499.2
  40                                                                                                                                                                          1.18       1.21
                                                                    400                                                    4                       1.07
  30                                                                                                                                     1.0               1.01
                                     29.5                                                                                                                          0.92
          22.9                               20.3
  20          21.2            19.2            19.6                  200                                         2.0        2

  10                  17.6              13.7                                        0.8                          1.1                     0.5
                                 14.4
                                                                        0                                                  0
    0                 -9.4                                                                           -0.0
                                                                                        -5.6
 -10                                                                                                                       -6              0
          ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                       ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                        ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
■■ Operating income before depreciation                             ■■ Total assets (left axis)
   Capital expenditures                                                ROA (right axis)




                                                                                                                       Sumitomo Chemical Company, Limited ◆ Annual Report 2012                             37
                    IT-related Chemicals

                                     Sales                             Operating Income                 Operating Margin
           FY2011
         Performance                                           -9.1%                     -58.0%                        -4.4 points

                                     ¥293.1 billion                    ¥11.0 billion                   3.7 %

     We seek to achieve further business expansion by focusing our business resources on
     key areas, such as polarizing film and other liquid crystal display (LCD)-related materials,
     photoresists and battery materials, where we expect high market growth.




     Z LCD-related Materials Business                                  Z Photoresists Business
     Our polarizing film business is the mainstay of the Sector’s      Photoresists are photosensitive resins used in semiconduc-
     core LCD-related materials business. According to                 tor manufacturing processes. Semiconductor manufactur-
     projections by DisplaySearch, a market research company,          ers are adopting new manufacturing processes to further
     worldwide demand for LCD panels for televisions will              miniaturize circuits. In addition to photoresists for the dry
     increase 8%, from 210 million units in 2011 to 227 million        argon fluoride (ArF) exposure process, we developed our
     units in 2012.                                                    photoresists with a high-performance photoacid generator
         Sumitomo Chemical currently is one of the world’s             for the ArF immersion process to meet semiconductor
     leading manufacturers of polarizing film, a key material          manufacturers’ changing needs. Our ArF immersion resists
     used in LCDs. We operate production facilities in Japan,          are evaluated favorably in the market because they can be
     Taiwan, Korea, China and Poland, and we have forged               utilized with or without top-coats. Sumitomo Chemical will
     strategic partnerships as a prime supplier with major LCD         continue to develop and launch advanced photoresists
     panel manufacturers in Korea, Taiwan and China. We                in a timely manner in response to further advances in
     started operation of a new polarizing film production line        semiconductor manufacturing processes.
     in Taiwan in July 2011, thereby expanding production
     capacity of polarizing films.
                                                                       Z Lithium-ion Secondary Battery Materials Business
         On the development front, we are working to expand            In the lithium-ion secondary battery materials business,
     our polarizing film product line to satisfy diverse customer      we are engaged in the manufacture and sale of separators
     needs. We are developing high-performance materials               and are also developing cathode materials. Our separators
     with high contrast and excellent visibility from wider view-      have higher heat-resistance than conventional products,
     ing angles for high-end LCD televisions, while introducing        and their reliability has been evaluated favorably by
     cost-competitive materials for high-volume, low-end               battery manufacturers. Moreover, our cobalt-free cathode
     LCD televisions. Also, we are developing thinner, high-           material does not use cobalt, which is in short supply
     definition polarizing films for smart phones and slate PCs,       worldwide, but it has achieved higher output and the same
     for which demand is expanding rapidly.                            level of capacity as conventional cathodes made using
         We also supply a variety of LCD-related materials, such       cobalt.
     as color filters, color resists and light-guide panels, to LCD
     panel manufacturers.




38   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                                                                    IT-related Chemicals




                         Color filter plant                               Photoresists                                   Separators for lithium-ion                         Polarizing film plant
                                                                                                                              secondary batteries




Corporate Business Plan FY2010 – FY2012


Basic Policy                                                                               Priority Initiatives

Establish the foundation                                                                    1     Strengthen existing businesses
for sustainable profitability                                                                     · Establish a more competitive position in LCD-related material business
through technological innovation                                                                  · Strengthen photoresist business
                                                                                                  · Enhance overseas operations
                                                                                            2     Expand business scope and develop new businesses



Sales & Operating Income (Loss)

  (Billions of yen)                                                                                                                                                                   (Billions of yen)
         400          ■■■ Sales (left axis)           Operating income (loss) (right axis)                                                                                                 40
                                                                                                                                                                            360.0
                                                                                                        307.1                             322.3
         300                                                                              297.5                                                               293.1                        30
                                                                    266.4                                                   265.2
                                                      229.2                                                                                    26.1
                                                                                                                                                                               24.0
         200                          174.8               21.7                                                                                                                             20
                        123.5               18.7
         100               14.3                                                                                                                                                            10
                                                                                                                                                                  11.0
                                                                          3.5                   6.3                                6.3
             0                                                                                                                                                                             0
                                                                                                            -1.0
                                                                                                                                                                                           -10

                      FY2003          FY2004          FY2005       FY2006                FY2007         FY2008             FY2009        FY2010               FY2011     FY2012
                                                                                                                                                                         (Forecast)



                                Corporate Business Plan FY2004 – FY2006                  Corporate Business Plan FY2007 – FY2009              Corporate Business Plan FY2010 – FY2012
    Priority
   Initiatives                  Expanded production capacity for                         Expanded production capacity for polarizing          Strengthen profitability of existing
                                polarizing film and color filters                        film, color filters and ArF photoresist              businesses, develop new businesses




Operating Income before Depreciation                                Total Assets & ROA                                                      Asset Turnover
& Capital Expenditures
(Billions of yen)                                                    (Billions of yen)                                       (%)             (Times)
  70                                           66.9                  400                                                      20             1.5
                                                                                                                                                                              1.31
  60
                                                                     300      299.5                                           15                                1.18 1.15               1.14
  50                    50.6                                                                                   265.0
          48.5                       46.4                                                          241.4 249.0                               1.0       0.95
                                                                                          220.9
  40                                                                 200                              10.7                    10
                    38.8
  30             33.4           29.5                                 100                                                      5
                                   27.7       25.5                                                                                           0.5
  20                                                                                                               4.3
                                                                                     2.0              2.7
                                                                         0                                                    0
  10
                                  11.5                                                     -0.4
    0                                                                                                                         -5               0
          ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                        ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                           ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
■■ Operating income before depreciation                              ■■ Total assets (left axis)
   Capital expenditures                                                 ROA (right axis)




                                                                                                                         Sumitomo Chemical Company, Limited ◆ Annual Report 2012                          39
                   Health & Crop Sciences

                                     Sales                          Operating Income                Operating Margin
           FY2011
         Performance                                       +5.3%                     +13.7%                      +0.7 points

                                     ¥264.1 billion                 ¥26.5 billion                  10.0 %

     The Health & Crop Sciences Sector engages in the development, manufacture and sale
     of agrochemicals and fertilizers, household and public hygiene insecticides, long-lasting
     insecticidal mosquito nets for controlling tropical infectious diseases, feed additives for
     poultry, and pharmaceutical chemicals. We are working to further globalize our business and
     contribute to increased food production, the promotion of health, better sanitation and the
     improvement of the environment.


     Z Crop Protection Business                                     Z Vector Control Business
     In our crop protection business in Japan, we are aiming to     Controlling malaria is one of the global priority issues
     increase our market share and broaden the scope of our         under the United Nations Millennium Development Goals.
     business by developing attractive new products in-house,       Given the growing demand for long-lasting insecticidal bed
     in-licensing new products, and pursuing partnerships.          nets for controlling malaria in Africa and other countries,
     From 2010 through 2011, we launched a herbicide for            we rapidly expanded our vector control business, mainly
     rice farming, a fungicide for rice blight and an insecticide   through sale of our OLYSET® Net. We are also developing
     effective against lepidoptera, and sales of these products     new products for controlling infectious tropical diseases.
     have grown steadily.
          Meanwhile, we are increasing investments and enhanc-
                                                                    Z Feed Additives Business
     ing collaboration to expand our overseas crop protection       Our feed additives business engages in the manufacture
     business. Our tie-up with the Australian agrochemicals         and sale of DL-methionine and methionine hydroxy
     company Nufarm Limited, in which Sumitomo Chemical             analog, which are essential amino acid feed additives
     has a 23% stake, has produced significant results in           used primarily in chicken and other poultry farming. The
     broadening our distribution. Nufarm and Sumitomo               methionine market is estimated at 900,000 tons annually
     Chemical have started to mutually distribute products in 19    and is expected to grow at an annual rate of around 5%,
     countries, mainly Brazil and Europe. Currently, Sumitomo       supported by an increasing demand for meat due to the
     Chemical and Nufarm mutually sell almost all of their          economic growth of developing and emerging countries,
     active ingredients, including biorational products. Also,      and a tendency to prefer chicken as a healthful alternative
     sales of our herbicide Sumisoya have been increasing in        to red meat, among other factors. We will continue to con-
     the United States through the distribution channels of         solidate our position as Asia’s top producer by meeting
     Monsanto Company, with which we collaborate in the crop        our customers’ needs in a prompt and flexible manner.
     protection business. In anticipation of Sumisoya’s further
     demand growth, we built a new plant in Oita, Japan, to
                                                                    Z Pharmaceutical Chemicals Business
     expand production capacity.                                    We are one of the world’s top manufacturers of pharma-
                                                                    ceutical chemicals, supplying pharmaceutical manufactur-
     Z Environmental Health Business                                ers with APIs and their intermediates. We possess the
     Our environmental health business contributes to healthy       current GMP-compliant quality assurance capabilities,
     living environments through its worldwide businesses in        advanced organic synthesis technologies and expertise in
     household insecticides for public hygiene, professional        scaling up processes for industrial production. To further
     pest control, and products for pets and other non-crop         expand the size of our business, we are meeting the needs
     applications. In this business, we have been actively          of pharmaceutical manufacturers promptly and precisely by
     developing new applications for our active insecticidal        building on our accumulated technology and expertise and
     ingredient, Eminence®/SumiOne®.                                fully integrating our research and development, manufac-
                                                                    turing, and sales capabilities.


40   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                                                            Health & Crop Sciences




     US crop protection chemicals                                 Crop protection products                                     Products using                                     OLYSET® Net
          subsidiary Valent U.S.A.                                                                                   our household insecticides




Corporate Business Plan FY2010 – FY2012


Basic Policy                                                                                Priority Initiatives

Aggressively pursue strategic investments                                                    1     Develop differentiated businesses
to expand business globally, strengthen                                                      2     Develop new businesses in downstream and related areas
high-profitability businesses, and contribute to                                             3     Build new business models
enhancing food security and improving public                                                 4     Strengthen and expand sales channels
health and hygiene and the environment
                                                                                             5     Pursue innovation in R&D and all aspects of business activities

Sales & Operating Income

  (Billions of yen)                                                                                                                                                                (Billions of yen)
         300          ■■■ Sales (left axis)            Operating income (right axis)                                                                                      290.0         50
                                                                                                                                                           264.1
         250                                                                                                                            250.8
                                                                                                                                                                                        40
                                                                                                         222.2            211.5
         200                                                          198.3                200.4                                                                              34.0
                                                       186.2                                                                                                  26.5                      30
                         167.1          171.6                                                                                    29.3
         150                                                                                                  24.4                          23.3
                                                                           23.3                  20.9
                                                           16.6                                                                                                                         20
         100                                   14.8
                             10.7
                                                                                                                                                                                        10
           50

              0                                                                                                                                                                         0

                      FY2003            FY2004         FY2005        FY2006               FY2007         FY2008           FY2009        FY2010         FY2011         FY2012
                                                                                                                                                                      (Forecast)



                                  Corporate Business Plan FY2004 – FY2006                 Corporate Business Plan FY2007 – FY2009          Corporate Business Plan FY2010 – FY2012
    Priority
                                                                                                                                           Expand methionine production capacity;
   Initiatives                    Expanded methionine production capacity;                Integrated Sumitomo Chemical
                                                                                                                                           invest in Nufarm Limited;
                                  introduced new agrochemicals                            Takeda Agro Co. Ltd.
                                                                                                                                           launch three new agrochemicals




Operating Income before Depreciation                                  Total Assets & ROA                                                  Asset Turnover
& Capital Expenditures
(Billions of yen)                                                     (Billions of yen)                                    (%)            (Times)
  50                                                                   400                                                  20             1.5
                                        45.6                                                             358.7
                                 41.9           41.1                                                              330.0
  40
                      37.5                                             300                                                  15
          33.7                                                                                                                             1.0              0.96
                                                                                           251.9                                                                   0.89
  30                                                                           240.4                                                                0.85
                                                                                     224.6     12.3                                                                        0.78      0.77
                                                                       200                                                  10
                           23.2                                                                  10.5
  20                                       19.3                                       8.9               8.0                                0.5
                                    15.6                                                                      7.7
                                                                       100                                                  5
  10              11.3
        8.5

    0                                                                     0                                                 0               0
          ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                         ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                       ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
■■ Operating income before depreciation                               ■■ Total assets (left axis)
   Capital expenditures                                                  ROA (right axis)




                                                                                                                     Sumitomo Chemical Company, Limited ◆ Annual Report 2012                           41
                   Pharmaceuticals

                                     Sales                            Operating Income                   Operating Margin
            FY2011
          Performance                                      -7.3%                         -27.0%                        -1.5 points
                                    ¥380.5 billion                    ¥20.9 billion                    5.5%

     Sumitomo Chemical’s Pharmaceuticals Sector is centered on Dainippon Sumitomo Pharma’s ethical
     pharmaceuticals business and Nihon Medi-Physics’ diagnostic radiopharmaceuticals business.


     Z Dainippon Sumitomo Pharma
                                                                       (3) Enriching the Pipeline for Continuous Creation of New Drugs
     Dainippon Sumitomo Pharma Co., Ltd. (DSP), under                  DSP is giving priority in its R&D efforts to the development
     its Mid- to Long-term Vision, is seeking to become a              of new drugs for central nervous system disorders, and is
     research-driven pharmaceutical company capable of                 also trying to develop new drugs in specialty areas such as
     competing globally by transforming its domestic business          cancer and immunology, where patients’ needs are highly
     structure, expanding sales in North America, and enriching        specialized and largely unmet.
     its product pipeline.                                                 In April 2012, DSP acquired Boston Biomedical, Inc., a
                                                                       biotechnology company focusing on R&D in the oncology
     (1) Transforming Domestic Business Structure                      area. The acquisition has given DSP an innovative pipeline
     With changes in the national health insurance drug pricing        of anti-cancer drugs targeting cancer stem cells. Having
     system in Japan, maintaining and expanding sales of               Boston Biomedical’s talented R&D team within the DSP
     off-patent drugs will become increasingly difficult. For this     group, the company aims to enhance its capabilities in
     reason, sales of new drugs must be expanded to maintain           developing cancer treatments.
     and improve the performance of our domestic business.
     DSP is focusing on expanding sales of its strategic prod-
     ucts: AVAPRO® (agent for the treatment of hypertension),          Z Nihon Medi-Physics
     LONASEN® (agent for the treatment of schizophrenia)               Nihon Medi-Physics Co., Ltd. (NMP) is a leading company
     and PRORENAL® (vasodilator), as well as newly launched            in the field of radiopharmaceuticals, which are effective
     products such as TRERIEF® (agent for the treatment of             in the early detection of diseases such as brain and heart
     Parkinson’s disease).                                             diseases and malignant tumors.
                                                                           NMP is conducting business in both diagnostic and
     (2) Expansion of Overseas Operations and Maximization             therapeutic fields with “nuclear medicine” as the keyword.
          of Profit                                                    Specifically in recent years, to accommodate rapidly
     Overseas, DSP is expanding sales of the atypical anti-            increasing demands for PET (positron emission tomogra-
     psychotic LATUDA® (generic name: lurasidone), which was           phy), we are contributing to the spread of PET procedures
     launched in the United States for the treatment of schizo-        by establishing and enhancing production facilities to
     phrenia in February 2011. By differentiating LATUDA® from         ensure the stable delivery of 18F-FDG as a high-quality
     current drugs on the market, emphasizing its efficacy, safety,    pharmaceutical product to extensive medical facilities
     tolerability and other advantages, DSP is aiming to maximize      throughout Japan.
     potential earnings from LATUDA® as quickly as possible.               In the therapeutic field, NMP launched a medical
     DSP is also conducting global Phase III clinical trials of        device for brachytherapy, also known as sealed source
     lurasidone for the treatment of bipolar disorder (depression).    radiotherapy, for prostate cancer, as well as a radiophar-
     In Europe, DSP is engaged in the joint development of             maceutical product to relieve the pain caused by cancer
     lurasidone with Takeda Pharmaceutical Company Limited             with bone metastasis, thus opening up new possibilities for
     with the aim of making a marketing authorization application      nuclear medicine.
     filing as soon as possible.                                           Furthermore, NMP obtained approval for a product
                                                                       with an indication of elimination of internal radioactive
                                                                       contamination. The product is used for emergency medical
                                                                       care for radiation exposure.




42   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                                                                      Pharmaceuticals




                               PRORENAL®                            Formulation studies                                           PET procedure                                   SentiProbe®




Corporate Business Plan FY2010 – FY2012

Basic Policy                                                                           Priority Initiatives

Aggressively invest resources and expand                                                 1     Further strengthen revenue base in domestic business
global operations, capitalizing on the                                                   2     Enrich product pipeline to achieve sustained development of new
strengths of the entire Sumitomo Chemical                                                      products
Group                                                                                    3     Expand overseas operations
                                                                                         4     Enhance the profitability of diagnostic radiopharmaceutical
                                                                                               business and expand therapeutic radiopharmaceutical business

Sales & Operating Income

  (Billions of yen)                                                                                                                                                              (Billions of yen)
          450       ■■■ Sales (left axis)                                                                                                                                             60
                                                                   56.2
                      Operating income (right axis)                                                                                   410.6
                                                                                                                                                         380.5          380.0
                                                                                        46.5
          300                                            38.3                                                                                                                         40
                                          34.4                                                         235.6           267.5
                                                         233.1    234.5                237.6                               29.9
                        27.8                                                                       32.4                                   28.7
                                          170.7                                                                                                              20.9           27.0
          150
                        166.6                                                                                                                                                         20




             0                                                                                                                                                                        0

                      FY2003          FY2004             FY2005   FY2006               FY2007        FY2008            FY2009        FY2010          FY2011         FY2012
                                                                                                                                                                    (Forecast)



                               Corporate Business Plan FY2004 – FY2006       Corporate Business Plan FY2007 – FY2009          Corporate Business Plan FY2010 – FY2012
      Priority                 Merged Sumitomo Pharmaceuticals Co. Ltd.       Acquired the US pharmaceuticals
     Initiatives               and Dainippon Pharmaceutical Co. Ltd.          manufacturer Sepracor Inc.
                                                                                                                                Market release of lurasidone;
                                                                                                                                expand sales in North America
                               to form DSP                                    (now Sunovion Pharmaceuticals)




Operating Income before Depreciation                               Total Assets & ROA                                                  Asset Turnover
& Capital Expenditures
(Billions of yen)                                                  (Billions of yen)                                    (%)             (Times)
  80                                                               800                                                  40              1.5
                                      75.8
                                                                                                673.7 656.8
          61.9                                    63.2                                                         626.6
  60                                                               600                                                  30
                               51.1                                                                                                     1.0
                      46.9                                                  449.5 442.1
  40                                                               400                                                  20
                                                                                                                                                  0.55                    0.56     0.59
                                                                                                                                                          0.53   0.48
                                                                                                                                        0.5
  20             18.3                                              200            10.7                                  10
                        12.7                11.3                                             7.3
                                   10.5                                                            5.4
                                                                                                   4.1
    0                        7.8                                       0                            3.3                 0                 0
          ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                      ’08/3 ’09/3 ’10/3 ’11/3 ’12/3                                        ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
■■ Operating income before depreciation                            ■■ Total assets (left axis)
   Capital expenditures                                               ROA (right axis)




                                                                                                                 Sumitomo Chemical Company, Limited ◆ Annual Report 2012                             43
               Developing Innovative Anticancer Drugs Targeting Cancer Stem Cells
            According to the International Agency for Research on Cancer, the number of new cancer patients world-
            wide was 12.7 million in 2008, and an estimated 7.6 million people died of cancer in the same year.
            The number of cancer patients is expected to increase, and the number of deaths due to cancer is forecast
            to rise to 13.2 million in 2030.
                Cancer is a disease with a high mortality rate, as most anticancer drugs have limited efficacy.
            Therefore, unmet medical needs are very high in the therapeutic area of cancer.
                Dainippon Sumitomo Pharma Co., Ltd. (DSP) aims to make oncology one of its future focus therapeutic
            areas next to the central nervous system (CNS) area, and it is focusing on the research and development of
            new anticancer drugs.




            Expected to be Effective against Recurrent and Metastatic Cases in Cancer Treatment

            Existing anticancer drugs are effective in causing                 metastatic cases, which are the main challenges
            the death of, and inhibiting the growth of, cancer                 in current cancer treatment. Due to difficulties in
            cells, but cancer stem cells exhibit resistance to                 identifying a target molecule specific to cancer
            these drugs. Cancer stem cells cause a recurrence                  stem cells, anticancer drugs acting on cancer stem
            or metastasis of cancer, and tumors formed from                    cells have not been sold so far. BBI608 and BBI503,
            the recurred or metastasized cancer stem cells are                 the new drugs under development, have the poten-
            resistant to conventional drugs. Boston Biomedical,                tial to become the world’s first anticancer drugs
            Inc. (BBI), which DSP acquired in April 2012, is                   targeting cancer stem cells. BBI608 is currently in
            developing two new anticancer drugs, BBI608 and                    the preparatory stage for a Phase III clinical trial for
            BBI503. BBI608 and BBI503 affect both cancer                       colorectal cancer in North America. If it achieves
            cells and cancer stem cells, and are expected                      regulatory approval, DSP aims to commercialize
            to be effective against refractory, recurrent and                  BBI608 as early as 2015.



                                 Treatment
                              by chemotherapy
                                                                                                         The “red cells (CSC)” are not
                                                                                                         controlled by existing therapy,
                                                                                                         and CSC tumorigenicity
                                            Cancer stem cells (CSC) survive                              (self-renewal activity), recurrence
                                         and develop chemotherapy resistance             Recurrence
                                                                                                         or metastasis takes place.
                                                                                                         Development of heterogeneity
                        Anti-cancer stem                                                                 by gene and epigenetic
                            cell drugs                                                                   changes build up resistance to
                                                                                                         chemotherapy.

                                                                                         Metastasis

                                                     Cancer cells and
                                                cancer stem cells eliminated
                                                                                                         Drugs targeting cancer stem cells
                                                                                                         are expected to offer significant
                                                                                                         advances to chemotherapy
                                                                                                         resistance, recurrence and
                                                                                                         metastasis over current therapies.
                 Cancer stem cells         Cancer cells                                  Complete cure




44   Sumitomo Chemical Company, Limited ◆ Annual Report 2012
                                                                                                                                                             Pharmaceuticals




DSP’s Product Pipeline                                                                                                                            (As of May 10, 2012)

Brand Name/                                          Proposed        Development                Development Stage*1
                Generic Name    Formulation                                                                                                        Remarks
Product Code                                        Indications        Location    Phase I   Phase II Phase III NDA submitted Approved*2


Central Nervous System Area
LATUDA® lurasidone     Oral                   Schizophrenia         Canada                                                                 Developed in-house
SM-13496 hydrochloride
                                                                    Japan
                                              Bipolar I             US and
                                              depression            Europe, etc.
                                              (New indication)
                                              Bipolar               US and
                                              maintenance           Europe, etc.
                                              (New indication)
                                              MDD with mixed        US
                                              features
                                              (New indication)
STEDESATM eslicarbazepine Oral                Epilepsy (Adjunct)    US                                                                     In-licensed from BIAL
          acetate
                                              Epilepsy (Adult       US
                                              monotherapy)
LONASEN® blonanserin            Oral          Schizophrenia         China                                                                  Developed in-house
                                              Schizophrenia          Japan
                                              (Addition of pediatric
                                              usage)
DSP-8658       TBD              Oral          Alzheimer’s disease US                                                                       Developed in-house
SEP-228432 TBD                  Oral          Neuropathic pain,     US                                                                     Developed in-house
                                              Depression                                                                                   (by Sunovion)
DSP-1053       TBD              Oral          Depression            US                                                                     Developed in-house
DSP-0565       TBD              Oral          Epilepsy              US                                                                     Developed in-house
DSP-2230       TBD              Oral          Neuropathic pain      UK                                                                     Developed in-house


Cancer Area
CALSED®*3 amrubicin     Injection             Small cell lung       China                                                                  Developed in-house
          hydrochloride                       cancer
BBI608         TBD              Oral          Colorectal cancer     US and                             Preparation                         Developed in-house
                                              (2nd/3rd line,        Canada                                                                 (by BBI)
                                              monotherapy)
                                              Colorectal cancer    US and
                                              (2nd/3rd line,       Canada
                                              combination therapy)
                                              Solid cancer (2nd/3rd US and
                                              line, combination        Canada
                                              therapy with Paclitaxel)
WT4869         TBD              Injection     Myelodysplastic       Japan                                                                  Jointly researched and
                                              syndromes                                                                                    co-developed with Chugai
                                                                                                                                           Pharmaceutical Co., Ltd.
                                              Solid cancer          Japan
WT2725         TBD              Injection     Solid cancer          US                                                                     Jointly researched and
                                                                                                                                           co-developed with Chugai
                                                                                                                                           Pharmaceutical Co., Ltd.
BBI503         TBD              Oral          Solid cancer          US and                                                                 Developed in-house
                                              (Monotherapy)         Canada                                                                 (by BBI)

*1 ■ Development in Japan      ■ Development in other countries      *2 Approved (awaiting NHI pricing)        *3 Brand name in Japan           *4 Brand name




                                                                                             Sumitomo Chemical Company, Limited ◆ Annual Report 2012                     45
     Brand Name/                                         Proposed         Development                Development Stage*1
                     Generic Name   Formulation                                                                                                          Remarks
     Product Code                                       Indications         Location    Phase I   Phase II Phase III NDA submitted Approved*2


     Respiratory Area
     Ciclesonide ciclesonide        Collunarium Allergic rhinitis         US                                                                    In-licensed from
     Nasal Aerosol                              (New dose form:                                                                                 Nycomed
     (Brand name                                HFA propellant)
     ZETTONA™)*4
     DSP-3025       TBD             Collunarium Bronchial asthma,         Japan                                                                 Developed in-house
                                                Allergic rhinitis


     Cardiovascular/Diabetes Area
     DSP-8153       amlodipine      Oral          Hypertension        Japan                                                                     Developed in-house
                    besilate                      (Combination agent)
                    Irbesartan
     SUREPOST® repaglinide          Oral          Type 2 diabetes      Japan                                                                    In-licensed from
                                                  (New indication,                                                                              Novo Nordisk A/S
                                                  combination
                                                  therapy with thiazo-
                                                  lidine or biguanide)
                                                  Type 2 diabetes     Japan
                                                  (New indication,
                                                  all combination
                                                  therapies including
                                                  DPP-IV inhibitors)
     METGLUCO® metformin     Oral                 Type 2 diabetes         Japan                                                                 In-licensed from
               hydrochloride                      (Addition of                                                                                  Merck Santé
                                                  pediatric usage)
     AS-3201        ranirestat      Oral          Diabetic                Japan                                                                 Developed in-house;
                                                  neuropathy                                                                                    co-developed with Kyorin
                                                                                                                                                Pharmaceutical Co., Ltd.
     DSP-8658       TBD             Oral          Type 2 diabetes         US                                                                    Developed in-house
     DSP-9599       TBD             Oral          Hypertension            Japan                                                                 Developed in-house


     Other Areas
     MEROPEN® meropenem             Injection     Purulent meningitis Japan                                                                     Developed in-house
              hydrate                             (Change of maximum
                                                  dose:6g daily)
     SMP-986        afacifenacin    Oral          Overactive bladder Japan                                                                      Developed in-house
                    fumarate
                                                                          US and
                                                                          Europe
     PRORENAL® limaprost            Oral          Carpal-tunnel           Japan                                                                 Joint researched and
               alfadex                            syndrome                                                                                      co-developed with Ono
                                                  (New Indication)                                                                              Pharmaceutical
     DSP-1747       obeticholic     Oral          Primary biliary cirrhosis Japan                                                               In-licensed from Intercept
                    acid                          (PBC), Nonalcoholic                                                                           Pharmaceuticals
                                                  steatohepatitis (NASH)
     DSP-6952       TBD             Oral          IBS with constipation, Japan                                                                  Developed in-house
                                                  Chronic idiopathic
                                                  constipation
     DSP-5990       ceftaroline     Injection     MRSA Infection          Japan                                                                 In-licensed from Takeda
                    fosamil                                                                                                                     Pharmaceutical Co., Ltd.




46   Sumitomo Chemical Company, Limited ◆ Annual Report 2012

				
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