2008-10-08 08:16:03 -

- Steel Partners Japan Strategic Fund (Offshore), L.P. ("Steel Partners") today announced that it has provided to Ishihara Chemical Co., Ltd. (OSAKA:4462) ("Ishihara" or the "Company") a presentation entitled "Suggestions to Improve Corporate Value" (the "Presentation"). In the Presentation, Steel Partners suggested specific ways that Ishihara could improve its mid-term business plan, enhance shareholder returns, achieve higher capital efficiency and

improve corporate governance.

In the Presentation, Steel Partners said it believes shares of Ishihara are undervalued, compared to international competitors based on TEV/EBITDA and Price to Book Value multiples, and noted that the Company's shares have lost approximately 58% of market value, or Yen 11.9 billion, since April 20, 2006(a). Steel Partners cited Ishihara's low operating profit margins and profitability, low return on equity ("ROE"), low dividend payout ratio and lack of financial transparency as causes for the decrease in market capitalization.

Steel Partners made the following suggestions to Ishihara: -0- -- Improve transparency of the mid-term plan -- Use ROE as a benchmark and develop a mid-term plan that includes a specific ROE target at or above 10% (in line with the Japan Pension Fund Association's ("PFA") target for its portfolio companies) in order to place more importance on capital efficiency at the Company -- Disclose capital expenditures, depreciation & amortization, research & development costs in the mid-term plan to offer an explanation to shareholders regarding the use of retained earnings -- Improve shareholder value through higher capital efficiency -- Improve ROE and EPS through share repurchases (and cancellations) or special dividends of up to Yen 7.2 billion -- Prudently increase the dividend payout ratio -- Improve corporate governance -- Introduce a stock option program for board members in order to align their interests with company performance and the interests of shareholders -- Identify and nominate at least three qualified candidates to serve as independent directors on the board of directors to monitor the improvement of capital efficiency

Steel Partners believes implementation of these suggestions could result in higher EPS and help Ishihara achieve an ROE of over 10%, the PFA target for its portfolio companies. Steel Partners noted that Ishihara's ROE failed to achieve the PFA's minimum 8% return required to support the re-election of directors to a company's board of directors in two of the Company's last five fiscal years.

Steel Partners, a shareholder of Ishihara since July 2003, is currently its largest shareholder, holding 505,600 shares, or approximately 6.8% % of the Company's outstanding shares.

The Presentation is available for review and download at www.spjsf.jp.

(a) As of September 26, 2008

About SPJSF

Steel Partners Japan Strategic Fund (Offshore), L.P. is a long-term relationship/active value investor that seeks to work with the management of its portfolio companies to increase corporate value for all stakeholders and shareholders.

Japan Media Contact:
PRAP JAPAN
Dean Kirkness, 813-3486-2931
financial@prap.co.jp
or
US Media Contact:
Steel Partners Japan
Jason Booth, 310-941-3616