Currently, Asia accounts for approximately 60% of the worldwide market for marine coatings. Moreover, more than 80% of newbuilding projects are carried out in Japan, Korea and China, with maintenance docks also concentrated in Asia.

In view of this situation, Nippon Paint plans to expand its overseas business network centering on the new NPMC by using manufacturing, sales, service and logistic networks possessed by NIPSEA corporate group*2, a part of Nippon Paint, while also establishing new bases at key locations in Europe, America and the Middle East. Nippon Paint also intends to manufacture and supply worldwide high-quality marine coatings and paints under the Nippon Paint brand for newbuilding as well as maintenance and repair of ships. It will also provide technical services to customers for newbuildings and repair of ships in and outside Japan.

With the aim of achieving more than 20 billion yen in sales by fiscal 2010, Nippon Paint aims to sharpen its competitive edge in the Asian market and secure a market share among the top three companies in the international marketplace.

For research and development, Nippon Paint will continue to handle basic research, while the new NPMC will be in charge of applications, development and improvements. This arrangement is intended to contribute to more efficient utilization of its group-wide technological resources.

Currently, the international trend in marine coatings shows growing concern for the marine environment. This includes a ban, which began in January 2003, on organic tin-based anti-fouling paints for the bottoms of vessels, adopted by the International Maritime Organization (IMO). In 1990, Nippon Paint became the first company to develop and introduce a tin-free hydrolytic anti-fouling paint called "Ecoloflex." This paint has enjoyed great popularity and high recognition worldwide. Along with this widely used product, Nippon Paint is striving to provide a range of advanced products and services under its own brand as well as technical know-how throughout the world. These efforts include "NOA," epoxy-based coatings given Self-Indicating (SI) technology enabling a painter to visually judge during the application process when the coating film has attained the specified thickness and "Ceramo," a super-heat-resistant shop primer.

*1 Wuthelam Holdings Pte Ltd
Headquartered in Singapore, Wuthelam Holdings Pte Ltd is a corporate group specializing in the manufacture and sale of paints and coatings. During fiscal 2002, the group's consolidated net sales amounted to approximately 90 billion yen. Since the 1960s, Wuthelam Holdings Pte Ltd has been a joint venture partner for coatings business in Asian countries.

*2 NIPSEA corporate group
A joint-venture corporate group established by Nippon Paint in cooperation with Wuthelam Holdings Pte Ltd, NIPSEA is engaged in a comprehensive paint and coatings business for construction, automobile and industrial applications. This corporate group is comprised of 15 companies (19 plants) located in Singapore, Malaysia (2 companies), Thailand, China (5 companies), Vietnam, the Philippines, Taiwan, Hong Kong, Korea and Indonesia (technological collaboration).

<Background Information>
Nippon Paint and International Coatings Limited (Headquarters: London, U.K., Managing Director: Leif Darner) have mutually agreed to terminate their association in marine coatings as of October 31, 2004 (see press release on July 31 for details).