News Release

Dec. 21, 2004
Daifuku Co., Ltd. (headquartered in Osaka and headed by President Katsumi Takeuchi) has recently established a local subsidiary, Daifuku Automation (Guangzhou) Co., Ltd. (hereinafter called DAG), to undertake all tasks ranging from sales and construction to after-sales service for automotive production systems. The purpose is to meet the rapid development of the automotive industry in the southern part of China. The new company will start operations on January 4, 2005.

The newly established DAG is a limited liability company 100% owned by Daifuku. With offices in Guangzhou, Fuzhou, and Chongqing, the company will start operations with 12 personnel: one resident Japanese (President) and 11 Chinese nationals. In addition to sales, construction, and after-sales service, DAG will commission the manufacture of peripheral equipment, including fabrication and assembly, to local cooperate companies. In the future, the company is planning to increase its capacity by adding technical personnel. The target is to achieve 1,500 million yen of sales in the next fiscal year (ending in March 2006).

Guangzhou, the central city of Southern China, is one of the biggest economic blocs on a par with Beijing and Shanghai. Active in the Guangzhou automotive production market are the Japanese leading automakers, Toyota Motor, Nissan Motor, and Honda Motor. By employing such means as setting up a joint venture with a local company, they are rapidly building new factories and expanding existing factories, thereby increasing capacity. Their production is expected to reach one million four wheelers in 2006 (as compared to 440,000 units in 2004), which would place Guangzhou in the top rank in China. Similarly, Fuzhou has South East (Fujian) Motor, which has set up a production expansion plan, and Chongqing has Changan Ford and other companies, which have done the same.

The entry into the automotive production system business, which is one of Daifuku's core enterprises, is an acknowledgment of the importance of China as the "third market" after Japan and the USA. Daifuku already established a local subsidiary, Daifuku Automation (Tianjin) Co., Ltd. (abbrev. DAT), in January 2003. By setting up the DAG, Daifuku has established a regional linkage system connecting the Northern China (Tianjin) and the Southern China (Guangzhou). The purpose is to monitor customer needs to stay one step ahead of Daifuku's competitors and to use such information to formulate solutions, thus boosting its endeavors to increase its presence in the Chinese market.

Augmenting its framework for automotive production systems, Daifuku will open up five more sites in the regions of Northeast and Central China by the end of March 2007, thus establishing a total of ten sites in China. In the meantime, by providing training at major factories in Japan and ensuring linkage between DAG and DAT, Daifuku will cultivate local people to become outstanding employees with the overall aim of achieving sales in China totaling 7,500 million yen.

Corporate Profile

Company name:

Daifuku Automation (Guangzhou) Co., Ltd.

Address:

• Headquarters
  Floor2, Room 223, No.7 Conbo Avenue, Free Trade Zone, Guangzhou, 510730 CHINA
• Guangzhou Office
  Room 1009, South Jing Dian Mansion, 198 Tian He Road, Guangzhou, 510620 CHINA
• Chongqing Office
  Room 627, Hilton Chongqing Kingrun Tower, No.131 Zhongshan San Lu, YuZong District, Chongqing, 400014 CHINA
• Fuzhou Office
  Room 2008, Newskyland Building, 157 Wusi North Road, Fuzhou, Fujian 350003 CHINA

Paid-in capital:

USD 605,000 (approx. JPY 66 million)

Opening date:

January 4th, 2005

Representatives:

Haruyoshi Amakusa, Chairman
Kazuo Iida, President