June 2, 2004

KYOKUTO KAIHATSU KOGYO CO., LTD.
6-1-45, Kosienguchi
Nishinomiya, Hyogo Japan
President and Representative of the Board of Directors, CEOKatsushi Tanaka(Code: 7226 –the first section of Tokyo and Osaka Stock Exchange)
Where to call:
Man ag ing D irec tor , Ge ner al Mana ger ,Administrative Division
Hiroki Uoi
Tel (0798)66-1000

Outline of Medium-term Management Planning
Severe business environment in the sector of SPV (Special Purpose Vehicles),which has always been our core has long surrounded us. However, since thelatter half of the fiscal year 2002, due to strengthening of exhaust emission
regulations for the diesel engine vehicles, replacement demand for trucks
including SPV centered around the Metropolitan area has been increased. On
the other hand, as to our export business, we consider it is even more important
to continue our aggressive overseas marketing activities mainly in China, where
they continue having very active construction investment.
As to Environmental Equipment business, we are concentrating our activities inmanufacturing and receiving orders for recycling related equipments as our coreand Refuse Pyrolysis Gasification and Melting System for which we can expect
growing demand in the future. Due to restriction of public investment of local
governments which results in more severe competition, we need to make evenharder effort to secure orders and improve our profitability of our products.
As to Real Estate Rental Division, we concentrate our activities in securing
stable revenue by effective utilization of unemployed assets and toll parking
business, for which we can expect growth.
Under such circumstances, we, together with our group companies launched theNew Medium-term Management Plan called “Plan 2004” on April 1, 2004.
In this plan, we, as a manufacturer, continue to pursue unparalleled competitive1

advantage in the market by technological advancement as our core tostrengthen our brand. By enhancing engineering staff members and education
system and while promoting development of new products and strengthening ofcompetitiveness of existing products, we make our further effort to expand ourmarket share, increase our total sales amount, and improve our profitability. To
make our contribution in the world as one of the global company, we will promote
our overseas business activities with an emphasis on Chinese market. And byemphasized injection of managerial resources by way of “Selection andConcentration” and by aggressive approach to enter into the new fields ofbusiness, we commit ourselves to build a solid business basis and to improve
our corporate value.

Essential feature of the Medium-term Management Planning: “Plan2004”《Term》
April, 2004 to March, 2007
《Basic Policy》
By reinforcing our management base, we committed to promote theprogress of our company and improve our corporate value.
① Strengthening our brand by enhancing our core technologies② Aggressive and global business activities in overseas market③ Restructuring of business infrastructure by “SelectionConcentration” and exploitation of new fields of business《Business objectives》
Sales:
Ordinary Income:
Profit of the term:
ROA:
ROE:

(Consolidated as of March, 2007)
66.5 billion yen
4.47 billion yen
2.65 billion yen
3.1%
4.6%

2and

《Major strategy》
1. Enhancement of core technologies in the existing business andstrengtheningofbusiness
infrastructureandupgrading
competitiveness and after-sale service activity by “Selection andConcentration.”
A. Reinforcement of competitiveness
improvement of its profitabilityinSPVbusinessand① Develop products which can make contribution in the world
enhancing technologies and strengthening our competitiveness.
② To secure orders of the trucks by the special demand due toexhaust emission regulations- Reinforcement of sales force in the Metropolitan area
- Strengthening of service network③ Cost reduction- Strengthening of price competitiveness by effective utilization ofparts sourcing bases and production bases in China- Major products: Cost reduction by more than 10% within theterm
B. Further strengthening of environmental business and focus on newbusiness field① Recycle Plaza and Recycling Center
To secure sure orders based on the long standing achievements
and reputation as leading manufacturer② Contracted operation and maintenanceTo secure orders of contracted operation and maintenance basedon the group power③ Sales expansion of next generation refuse incinerator and focus
on new business field- Construction of 1st facility of Refuse Pyrolysis Gasification andMelting System and securing of continuous orders

3- Expansion to bio-venture market
C. Expansion of M&A and business tie-up and review of thenon-profitable products① Expansion of business tie-up by mutual OEM and marketing withcompetitors and improve profitability② Review unprofitable products to integrate them
D. Securing steady revenue from real estate leasing business and focus
on growing business area
① Effective utilization of unemployed assets② Expansion of toll parking business③ Strengthening of used vehicle sales
2. Aggressive expansion of overseas business and development offuture core business① Aggressive overseas marketing activities focusing on Chinese
market② Establishment of production base in China③ Expansion of parts sourcing bases from China④ Development of new business harnessing core technologies andcooperation among government, industry, and academia
3. Enhancement of personnel, organizational, information and financial
strategies and corporate governance in order to promote themanagement strategy① Fostering and revitalization of personnel by reform of personnel
system
② Promotion of globalization of management and streamlining of4

operations by utilization of IT③ Effective employment of group management resources④ Environmental-friendly management through ISO14001 andtransparency and strict risk management by upgraded corporate
governance《Major management index》(Consolidated)

March, 2003
Result(Unit: hundred million yen)March, 2004
March, 2007
ResultPlan

Sales

552.69574.28665.00Ordinary Income

16.25

29.18

44.70

Profit of the term

2.01

13.28

26.50

ROA (%)

0.3

1.6

3.1

ROE (%)

0.4

2.5

4.6

1,378

1,331

1,597

Number of employees

5