Dear customers, shareholders ang employees,The Year of the Sheep is upon us. I wish that you all may be healthy and happy throughout the year 2003.The year 2002 has been an eventful one indeed. Although we triumphed in the World Cup, we are still facing an unstable financial situation amid the world economy?s downward trend due to ongoing terrorist threats and the potential of war. Despite all these negative factors, we have achieved better business results than last year. I believe that this outcome was made possible by the indomitable spirit and devotion of our employees, our shareholders? love for SK Chemical and the support of our customers.Dear SK Chemical employees,2002 was the first year that we implemented the ?To Be Model? program of SUPEX 2000, and all of us have tried our best to accomplish our goals.In reviewing the major achievements of last year, SKYGREEN and CHDM have created a basis for growth by successfully entering the global market, while SKYFLEX was effectively established in Tsingtao, China as another step of our globalization strategy. SKYPET and SKYVIVA were also established in Poland and the U.S. under the names SK Eurochemicals and Atis. We have made significant progress in the area of PTA export thanks to technical tie-ups with foreign companies. Other accomplishments include the reconstruction of a mass production facility for Acetate TOW.Our Life Science Division has shown considerable growth in the past two years. Most notably our first herbal tablet ?Joins? was successfully introduced in the Korean and Australian markets, and even graced the cover of The Times (Asia). Besides the ?Omed? now available in Europe, the popularity of ?Trast? and ?Ginexin? in overseas markets was enough to enhance the international marketability of other Korean pharmaceutical products.The biggest achievement of our Fine Chemical Division was its expansion into the international market, following the addition of a greater number of importing countries. Its development of TPU for calendar rings, spring aids, toners and other new bio products promises to make a great contribution to the growth of Korea?s fine chemical industry.Last year we made wide range of effort to instigate creative and dynamic changes under the slogan ?4CaS?. Above all else, we concentrated the bulk of our resources on customer satisfaction management through continuous quality improvement. We implemented a performance-oriented PMS system based on our new infrastructure and KPI, and now more employees have access to quality information through various company-paid training programs. We are making all the preparations necessary to stay ahead of our competitors in a fast-paced era of innovation.Dear employees,Despite all the efforts we have made, the uncertainty of our future survival is growing as economic conditions worsen. Current fluctuations in currency exchange rates and the increase of PX and EG prices are enough to threaten the very survival of SK Chemical. Ever-increasing oil price due to the possibility of war and the continued migration of domestic companies into China are only a few examples of our current crises. In view of these factors, I?d like to point out some of our objectives for this year.First, all our divisions must establish and thoroughly implement a survival strategy.The SUPEX 2000 program was defined as a route to building a better company. To achieve these goals, each and every one of our divisions acknowledged the need to solidify their position as a leader in the industry. The oil, PET and acetate divisions in particular are facing oversupply and increasing raw material prices, and can only prevent the destruction of company value through close cooperation and hard work.We have devised the ?New Start 20? plan as a countermeasure against such difficulties. Some divisions have already set up their goals, while others are still in the process of drafting their future ambitions. Whatever their current situation, the goals of each division must be anchored in time; competitiveness must be sufficiently strengthened in order to withstand the difficulties of the future. Accordingly, all MPRS must try their best to accomplish their goals in such a way that the plan and execution are synchronized. For this project, I?ll see to it that we establish a follow-up system that is closely linked to performance evaluation.Second, we must speed up the implementation of our globalization strategy.As for the recent introduction of SKYPET and SKYVIVA into the international market, they must focus on minimizing the trial errors and establishing a fundamentally competitive business structure. The current system of fine chemical, life science and acetate divisions must further strengthen their global marketing abilities and expand business opportunities, with an aim to becoming a major player in the world market. They must also keep their eyes open for opportunities that will allow SKYFLEX and other businesses to enter the Chinese market. To this end, I ask all MPRS to establish a network with foreign companies and further develop their individual capabilities.Third, we must strengthen R&D activities in order to accomplish the ?To Be Model? of new businesses. Existing divisions should take the initiative in promoting competitive growth strategies. In particular, we have to outline a profit maximization plan for current TPU facilities and supplementary plans for the Life Science Division as soon as possible. As for new projects, the environment-friendly fine chemical project and the commercial production phase of information & electronic goods must be completed. We must also carry out creative research and development activities on value-added fine chemical products and new pharmaceutical products. The continued development of new products is the only way to guarantee our future. In order to meet our objectives, I will continue to establish the best possible infrastructure.Dear employees,The management conditions of 2003 may be harsh on our business divisions, but we have always been wise enough to overcome any obstacle. If we all come together to promote the SUPEX program and achieving the ?To Be Model? of a ?Better Company?, I?m sure that we can accomplish our New Year?s goal.Happy New Year to all our customers, shareholders, employees and families!Thank you.CEO Hong Ji-hoSK ChemicalJanuary, 2003