The Kingdom of Saudi Arabia, the major supplier of crude oil to Japan, set an agenda in the 1970s to promote the modernization and development of its petrochemical industry and had requested Japan's cooperation in achieving its goal. In response to the Kingdom's request, SPDC was established in 1979 as a pilot study company by a consortium of Japanese companies to conduct a project feasibility study together with Saudi Basic Industries Corporation (SABIC). Consequently, SPDC became an investment company in 1981 with the aid of equity participation from the Japanese government and proceeded to implement its work in the petrochemical industry as a national project, which resulted in the signing of a 50:50 joint venture agreement for the establishment of Eastern Petrochemical Company in Saudi Arabia, "SHARQ".

SHARQ has been producing intermediates for fiber and resin products such as ethylene, ethylene glycol and polyethylene using competitive raw materials available in the Kingdom. After the completion of the third expansion in 2010, SHARQ's production capacity became one of the largest in the world on a single site basis. In line with the Kingdom's policy of Saudization, 95% of SHARQ's employees are Saudi nationals at the end of 2023. Also, the Higher Institute for Plastics Fabrication (HIPF) was opened in 2007 with our full support and has been providing more than 2,600 graduates to the domestic plastics industry by the end of 2023, contributing to the Kingdom's industrial and human resource development.

SHARQ is no exception to the current challenging conditions in the petrochemical industry, mainly due to rising feedstock and fuel prices, as well as undesirable structural changes in the product supply-demand balance. However, SHARQ's key products, ethylene glycol and polyethylene, will continue to be in global demand as essential raw materials for the clothing and packaging industries, which are critical to the growth of society. SPDC's mission is to "improve the quality of people's lives", so we will do our best to improve SHARQ's short-term profitability while enhancing EHSS (Environmental, Health, Safety and Sustainability) and improving work quality to ensure safe and stable operations.

In addition, in line with global trends, the low-carbon, circular economy is entering a phase that requires significant action. Together with our partner SABIC, we will continue efforts to reduce the carbon emissions of SHARQ's feedstocks, fuels and products by leveraging the technological and scientific expertise of both the Kingdom and Japan, and we will continue to respond to global needs to realize a sustainable society.

Through these initiatives, we will work with our stakeholders to improve SHARQ's business, create social value, and contribute to building a deeper partnership between the Kingdom and Japan that the new era demands.