Special Report

Restructuring of the Production System

The current situation of the production system and future development

Details of reorganization plans for Yokohama and Shiga have been specified and the plans have started, as we work
toward achieving net sales of 50.0 billion yen. By strengthening development and production capabilities of bothproduction bases, we will respond to increased orders both domestically and overseas.

Current Situation

March 2018 (Scheduled)

Yokohama Plant

Yokohama Plant

Transportation systems works

Transportation systems works(Rearrange layout)

From June 1, 2014, we began a medium-term management plan, “NEXT 100: Beyond 100 years.” As we work toward achieving the final
goals of net sales of 50.0 billion yen and an overseas net sales ratio of 50%, we have set “restructure production system” as one part of theIndustrial systems works

fundamental policy. We recognize that our most important challenge is to establish a production system that can respond to expanded orders
both domestically and overseas.
To respond to an anticipated expansion of orders in the future, we will expand production capabilities of the Yokohama Plant, which is theInformation equipment systems works

Information equipment systems works

Research Laboratory

Research Laboratory(Excluding manufacturing)

main production base for the Transportation Systems segment, and newly establish a factory and consolidate functions in the Shiga region, whichis responsible for production of the Industrial Systems segment, in order to establish a structure to support net sales of 50.0 billion yen.

New Shiga Factory

Shiga Factory
Industrial systems works

TD. Drive Mfg. Co., Ltd. (Subsidiary)

TD. Drive Mfg. Co., Ltd. (Subsidiary)

Manufacturing, sales, and repair of industrial motors

Manufacturing, sales, and repair of industrial motors

Excluding sales employees of the Industrial Systems segment, all employees of thedevelopment, design, manufacturing, and quality assurance divisions and of the current
TD. Drive Mfg. Co., Ltd. will be moved to the new base. (TD. Drive Mfg. Co., Ltd. is alsoscheduled to relocate to the same premises.)

Shiga Factory (Inverter manufacturing workshop)

Improve productivity of the Industrial Systems segment by establishing a new base in ShigaByestablishing a new base in Shiga Prefecture, we will advance efficient development and creation centered on high value-added
system products at a base that combines development, design, manufacturing, and quality assurance divisions.
Concerning
the production system in the Industrial Systems segment, land has been acquired in Ryuoh Town, Shiga Prefecture, which
is near our existing Shiga Factory (Moriyama City), and our plans call for construction of a new factory that will begin operations inspring 2018. Also at the new factory, we will promote segmentation of production lines, striving to create the ideal next-generation
production base where female employees can play an even greater role.

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477

Details of industrial land to be acquired
Location

2982 Aza-Tsutsumigatani, Aza-Okaya, Ryuoh-cho, Gamo-gun, Shigaand others (Within Shiga Ryuoh industrial park)

Area

Land: 34,400 m2 (tentative size)

Acquisition cost
Current state

1,112 million yen (tentative price)
Forest. The land is being prepared as an industrial park by Shiga
Prefecture Land Development Public Corporation.

oaidinnLi

MakCurrent Shiga Factory(Moriyama City)

ToRyuohKyotoe

Lake BiwaKusatsu

Maibara Junction

senMeishin ExpresswayKyoto
Prefecture

MaibarakanShiga
Prefecturehin

On March 23, 2015, to secure land for building a new factory withthe aim of strengthening production capabilities and improving
production efficiency, we concluded a purchase reservationagreement for a piece of industrial land.

oS
Due
to increased workloads in the Transportation Systems segment, an expansion of manufacturing space was required. By combining
the industrial systems factories that were split into the Yokohama Plant and the Shiga Factory, and rearranging the layout of thetransportation systems factory, we will work on improving our production capability.
Specifically,
the Yokohama Plant currently has design, development, and quality assurance divisions for industrial systems products, andby consolidating these functions in the Shiga region, the production system for electrical equipment for railroads will be strengthened at
the Yokohama Plant. Production lines will also be replaced with high-efficiency facilities and we plan on achieving an increase of
between 30% and 40% in production capacity as an end result.

Regarding the acquisition of fixed assets (conclusion of purchase reservation agreement)

aid

Rearrangement of layout of transportation systems factory at Yokohama Plant

Tok

Specific measures for the restructuring of the production system

7

Industrial systems works

Kosei LineYokohama Plant (aerial photo)(Design and manufacturing of some products)

Gifu
Prefecture258
306

Mie Prefecture421

Shiga Ryuoh Industrial Facility
Line(Scheduled location of construction)
1.5 km from the Ryuoh Interchange on the Meishin Expressway

Schedule of acquisition
Details of counterparty

Conclusion date of purchase reservation agreement

March 23, 2015

Name

Shiga Prefecture Land Development Public Corporation

Conclusion date of purchase agreement

Businessdomains

Acquisition, management, disposal, etc., of land for public works
projects, public land, etc.

March 2017
(Scheduled completion of preparations)

Date of land transfer

March 2017 (Same as above)
Toyo Denki Seizo Report 20158