May 14, 2024
Company name:
Representative:Contact:

KATO WORKS CO., LTD.
Kimiyasu Kato
President and Representative
Director(Code number: 6390)
Yasushi Ishimaru
Executive Officer and General
Manager, General Affairs andPersonnel Control Department(Phone: +81-3-3458-1111)

Readjustments of Mini Excavator Business in China
KATO WORKS CO., LTD. (the “Company”) hereby announces that the Company is currently
readjusting the mini excavator business where the Company’s joint venture (subsidiary), KATO SCE(XIAMEN) CONSTRUCTION MACHINERY CO., LTD. (“KATO SCE”) is producing and selling miniexcavators in Xiamen City, Fujian Province, CHINA, and plans to take steps, including the liquidation ofKATO SCE.
KATO SCE was established and jointly funded by Ishikawajima Construction Machinery Co., Ltd.
(acquired by the Company thereafter) and SCE Construction Machinery Co., Ltd. in Hong Kong in2004. After licensing of technology, KATO SCE started producing and selling mini excavators in thefollowing year. Since then, the sales and sales volume of KATO SCE have steadily increased helped by
the rapid economic growth of China and high evaluation of the products from the market. Even during
the period of economic slowdown in China, KATO SCE has remained in surplus and has delivered
strong business results.
In recent years, however, severe business environment has continued, such as decrease in demand forconstruction machines due to the slowdown of infrastructure investments arising from the slump in realestate business in addition to the rise of the Chinese local manufacturers, and we now see no prospect forrecovery.
In such a situation, after examining the future prospect of KATO SCE’s business and risks in case of its
continuation, the Company has decided not to extend the joint venture agreement, which will expire inJune 2024, and enter into negotiations with the joint venture partner, in which it will discuss several
matters, including the liquidation of KATO SCE.
This is a part of the readjustments of our overseas business portfolio for the formulation of foundation
for the future (“selection and concentration”) described in the Medium-term Management Plan. As
described in “Suspension of production in KATO SCE (XIAMEN) CONSTRUCTION MACHINERYCO., LTD.” announced in March 8, 2024, the Company is now fundamentally reviewing its business,including this case, assuming the liquidation of two manufacturing bases in China which have played apart in the Group’s business results for a long time.
Meanwhile, for a next step, in order to form the business foundation in India which has grown to theworld’s largest populous country by surpassing China as a new growing market, the Company has
created the “Office for Indian Business” in the headquarters in January 2024. In addition to capturing
huge demand for construction machines in India, a new major market replacing China, the Company will

expand its market area including neighbor countries around India to which the Company has not
approached so far, and secure medium-and-long term revenues sources.
The Company is currently examining the impact this matter may have on its consolidated financial
results for the fiscal year ending March 31, 2025. The Company plans to make timely announcements
regarding the development of its overseas business, including this plan, as it progresses.

(Reference) Company profile of KATO SCE (XIAMEN) CONSTRUCTION MACHINERY CO., LTD.
Company name:Location:Date of establishment:
Capital:Business description:

KATO SCE (XIAMEN) CONSTRUCTION MACHINERY CO., LTD.
Xiamen City, Fujian Province, CHINA
October 22, 2004
30 million RMB (holding 51.0% of shares)
Production and sales of products and parts such as hydraulic excavators