News Release

May 14, 2002
Daifuku Co., Ltd. has established a local subsidiary in Shanghai, China. Launched into operations April 1, the new company will be responsible for sales and servicing of material handling systems.

The new company, Daifuku (Shanghai) Ltd. (DSL), is a wholly-owned subsidiary of Daifuku. It will have offices in central Shanghai and the Pudong New Area on the outskirts of the city.

Over the last ten years, Daifuku has enjoyed increasing opportunities to supply production line systems to auto plants in China. In 1993, it established an office with a company representative in Beijing, establishing a similar office in Shanghai the following year. (Both offices will remain open following the establishment of the local subsidiary.)

The Shanghai company will be the eighth Daifuku subsidiary to be set up in the Asian region, following the establishment of subsidiaries in Thailand, Malaysia, Singapore, Indonesia, Taiwan, and South Korea. In all, there are 12 Daifuku subsidiaries around the world, including two in South Korea.

DSL will be responsible for sales, after-sales service, and maintenance work, mainly for automated warehouses, sorting systems, and other distribution center systems, as well as for conveying systems in the semiconductor and liquid crystal industries, for which inquiries and actual sales have jumped in the last two to three years. Initially, the company will not have its own production facilities, but will seek to expand the market by providing technology to local manufacturers and by outsourcing production. However, the possibility of establishing a production base will be considered, if the need arises. The Japan office will retain responsibility for handling the auto production line system business.

Within the IT-related sector, plans call for the construction of several dozen new semiconductor plants in Shanghai and Beijing, with plans for the construction of new liquid crystal and PDP (plasma display panel) plants also appearing likely to proceed. Daifuku has a proven record in this sector, filling orders last year for interbay auto transport and storage systems for clean rooms from SMIC (Semiconductor Manufacturing International Corp.), China's first semiconductor foundry, as well as Japanese manufacturers. In the material handling systems sector, deliveries to pharmaceutical, electrical appliance, foodstuff, and textile companies are increasing, including delivery of a large-scale center to a global pharmaceutical manufacturer.

DSL will also have its own purchasing arm, playing a part in Daifuku's worldwide optimum procurement program. In the future, China will be an important base in the three areas of marketing, procurement, and production. With this in mind, Daifuku plans to develop a range of activities closely linked to the local market.

Daifuku's Chinese operations are expected to grow rapidly, particularly in the IT-related and distribution sectors. The company's total sales targets, which include operations in the auto-related sector, are 3 billion yen in fiscal 2003, and 7 billion in three years' time.

Corporate profile

1) Name:

Daifuku (Shanghai) Ltd.

2) Office:

Room 1803, Shanghai Singular Mansion No.322 Xianxia Road
Shanghai 200336 CHINA
Tel:86-21-6208-5257 Fax:86-21-5257-0087

3) Capital:

50 million yen

4) Commencement
of operations:

April 1, 2002

5) Representatives:

Chairman: Masaki Shimono
President: Katsutoshi Fujiki

6) Employees:

20