February 2, 2005
Dia Reiki Kogyo Co., Ltd.
Nissan Kogyo Co., Ltd.

Two Subsidiaries of TNSC to Merge in April
Taiyo Nippon Sanso Corporation (TNSC) hereby announcesthat two of its subsidiary companies — Dia Reiki Kogyo
Co., Ltd., headquartered in Sakai City, near Osaka, andNissan Kogyo Co., Ltd., of Yokohama — are scheduled tomerge with effect from April 1, 2005.
Following the merger, construction will begin on anew manufacturing plant for cryogenic gas equipment, to bebuilt on a plot of land within the grounds of the Sakai
facilities of TNSC. The start of operations at the newplant is envisaged for December 2005.
This merger is part of an overall strategy for thenext three years, mapped out by TNSC president Hiroshi
Taguchi, aimed at realizing the maximum synergy from therecent merger between Nippon Sanso and Taiyo Toyo Sanso by
optimizing efficiency through the amalgamation ofaffiliated companies.

Background to Merger
A major reorganization is taking place in the industrial
gases industry, whose members constitute the customers of
the two companies to be merged. Severely increased
competition is forecast as a result, and the decision tomerge the two companies was taken as a means of achieving
the critical mass that would enable more efficient
deployment of management resources. This, in turn, willrealize synergistic benefits that will translate into
greater competitiveness in both technological development
and cost-performance. Such effects would not only enable
the merged entity to offer its customers an improved
service, they are also judged necessary in order for the
new company to make a sufficient contribution to theconsolidated earnings of the Taiyo Nippon Sanso
Corporation group.
The two companies share common products andtechnologies, including cold evaporators and dedicatedtank trucks for the transport of liquefied gases.
Additionally, they also possess products and technologies
unique to themselves. For example, Dia Reiki Kogyo boasts
a lineup of small refrigerated containers for industrial
gases and also for special gases used in the biotechnology
and medical fields. For its part, Nissan Kogyo produces
unique evaporators and other LPG- and LNG-related
equipment.
The fusion of the two sets of proprietary
technological expertise boasted by the two companies issure to lead to an expansion of their combined lineup ofunique products. The management of TNSC is confident that
this will put the new company in an unrivalled position

within the Japanese market for gas-related cryogenic
equipment.

Purposes of Mergerz

To realize the merits of scale in respect of theefficient and effective allocation of management
resources, as well as the realization of synergistic
effects from the combination of the business lines of
the two pre-merger companiesz

To create an enterprise unique in the Japanese market
in terms of the technological expertise it possesses
and its product lineupz

To attain higher productivity and profitability throughthe use of cutting-edge equipment at a new purposebuilt factory, achieving higher operating efficiency
for the merged entity than for the two separate
companies at present

Schedule and Details of Merger
Date:

April 1, 2005

Trade name:Cryo One Inc.

Head office:

2-8 Chikko-Shinmachi, Sakai City, Osaka
Prefecture (upon merger; address iscurrent office and factory of Dia Reiko
Kogyo). The combined entity will
relocate to the new address shownbelow, also in Sakai City, uponcompletion of the new factory.
Representatives:
President and Representative Director:
Kiyonori Okumura (currently president of Dia ReikiKogyo)
Executive Vice President and Representative Director:
Ken’ichi Hamachi (currently president of Nissan Kogyo)

Management Goals and Plans of Newly Merged Company
Goalsz

To become the leading East Asian company in its
industrial niche in terms of technological expertise,product quality, and cost-competitivenessz

To possess a lineup of products in the cryogenic gas
equipment field unmatched by any other company in Japan

Management policies
Optimization of merger effectsz

To lower production costsz

To bolster capabilities in technological research,
product development, and production capacity throughintegration of the management resources of the twofounding companiesz

To raise marketing power thanks to the more impressive
combined lineup of technologies and products, leading
to increased sales

z

To achieve higher productivity (and profitability)
through the use of state-of-the-art production
facilities

Construction of cutting-edge plant for the manufacture ofcryogenic gas equipment
Location:

Ohama-Nishimachi, Sakai City (within groundsof Sakai facilities of parent company TNSC)

Scheduled date of completion: October 2005
Scheduled start of operations: December 2005

Sales projections for three years down the line
Sales for fiscal 2007 are projected at ¥3.2 billion.