September 30, 2003
Kyokuto Kaihatsu Kogyo Co., Ltd.

Wholly owned subsidiary in China develops the local
production of special purpose vehicles.
Kyokuto Kaihatsu establishes a special purpose vehicle plantin China (Kunshan City, Jiangsu).
Kyokuto Kaihatsu Kogyo Co., Ltd. (Manufacturing and marketing the special
purpose vehicle and environment related equipments/facilities, Head office:Koshienguchi 6-1-45, Nishinomiya-shi, Hyogo, Japan 663-8545, President: Mr.
Katsushi Tanaka) establishes a wholly owned subsidiary in Kunshan City,Jiangsu, China to further expand the main business: special purpose vehicles
by constructing a plant and starting its production from October 2004.
Japanese domestic market of special purpose vehicles is experiencing rapid
growth of replacement demands mainly in metropolitan area from the second
half of 2003 fiscal year due to gaseous emission regulation of diesel-engine
vehicles to be enforced from October 2003. However, the market will havebasically continued severe environments because of controlling investment inpublic sectors. On the other hand, the export of mixer and concrete pumpvehicles to China is drastically increasing.
To further expand the special purpose vehicle business, it is required toincrease the price competitiveness and focus on the overseas markets. Amongthe markets, China and other Asian countries having active construction
investments

areveryimportanttodevelop.

Tomaintainthepricecompetitiveness and expand the business, a local manufacturing plant isnecessary.
This new plant is a first overseas plant in Kyokuto Kaihatsu group. Kyokuto
Kaihatsu’s wholly owned subsidiary (Kyokuto Kaihatsu (Kunshan) MachineryCo., Ltd., Chairman: Mr. Ichiro Fujinami) obtains the land and building andoperates the plant. In the initial stage plan (starting the production from October2004), we will start the production of construction related mixer and concrete
pump vehicles. After that, monitoring the demands in Chinese market, we will
expand the product line-up to garbage collection trucks, etc.
The special purpose vehicles produced in the new plant are not only for
Chinese market but also for South East Asian market. The plant will also supply
the parts and kits to Japan to support the cost reduction in the head plant.
The amount of investment from Kyokuto Kaihatsu Kogyo to the local subsidiaryis US$ 8,000,000. The subsidiary’s investment of plant construction & facilities
is planned to approximately JPY 1,000,000,000.
<Contact for information>
Administration Department, Kyokuto Kaihatsu Kogyo Co., Ltd.
Web site: http://www.kyokuto.com/
Koshienguchi 6-1-45, Nishinomiya-shi, Hyogo, Japan 663-8545
Phone: +81-798-66-1000, Fax: +81-798-66-8146<<Outline of new plant in China>>(1) Company nameKyokuto Kaihatsu (Kunshan) Machinery Co., Ltd.

(2) AddressJapanese Industrial area, Economic and technicaldevelopment zone, Kunshan City, Jiangsu, China(3) Board of directors and management organization
Title
NameOverseas
Section in charge at new plant
posingActual section in charge at head office in ( )Chairman
IchiroNon-resident
Fujinami(Actually operating officer in head office,general manager of overseas operationsdevelopment)
Tomoki
Resident
General administration
Director
Ueyama(Managingdirector)

Director(Generalmanager)

Masao
Resident
MitsudomeDirector(Generalmanager)

Yoshihiro
IshiuraResident

Director(Generalmanager)

Takeo
Norimitsu

Resident

Director(Generalmanager)

Kazuo
Takami

Resident(Actually operating officer in head office,deputy production chief, general managerof Yokohama plant)
Manufacturing & production engineering(Actually general manager of Hachinohe
plant of Kyokuto Kaihatsu Tohoku Co., Ltd.)
Procurement (also holding the post ofmanaging director of Kyokuto Special
Purpose Vehicle Trading (Shanghai) Co.,Ltd.)(Actually managing director of Kyokuto
SpecialPurposeVehicleTrading(Shanghai) Co., Ltd.)
Planning, market development, generalaffaires, human resources, and financial(Actuallymanagerofmanagementplanning division)
Technical, quality control, and procurement(Actuallyinchargeofoverseas
procurement project in overseas operations
development division of head office)(4) Workforce

First year (FY 2005; Jan. 1 to Dec. 31, 2005)
100 personnel (Local staff: 95)
5th year (FY 2009; Jan. 1 to Dec. 31, 2009)
250 personnel (Local staff: 245)

(5) Main productMixer, concrete pump, garbage collection vehicles,etc.

(6) Production volume(7) Sales budget
Sales in million yen

First year (FY 2005)

400 units

5th year (FY 2009)

800 units

1st year

3rd year

5th year(FY 2005)(FY 2007)(FY 2009)

2,200

4,700

5,600

(8) Plant area (land)

83,140m2(9) Plant area (building)

15,000m2

(10) Paid-up capital

US$ 8 million (wholly owned by Kyokuto Kaihatsu
Kogyo Co., Ltd.)(11) Total investment

US$ 20 million(12) Capital investment

Approximately JPY 1,000 million(13) Time schedule

Establishment of local subsidiary: August 5, 2003
Already obtained the sales license.
Starting the plant construction: February 2006
Completion of the plant construction: September2006
Starting the production: October 2004