May 6, 2016
NEWS RELEASE
Name of Listed Company

Tsumura & Co.

RepresentativeTerukazu Kato
President & Representative Director(Code: 4540 First Section of the Tokyo
Stock Exchange)

ContactNoboru Suzuki
Head of Corporate Communications Dept.
Telephone: 81-3-6361-7100

Tsumura Announces Establishment of a Joint Venture in China
Tsumura & Co. (Headquarters: Tokyo, Japan; President & CEO: Terukazu Kato; hereafter, “Tsumura”)
announces that it has entered a joint venture agreement with Shanghai Traditional Chinese Medicine Co., Ltd.
(Headquarters: Shanghai, China; Chairman: Chen Junli; hereafter, “Shanghai Traditional Chinese Medicine”),
a subsidiary of Shanghai Pharmaceuticals Holding Co., Ltd. (Headquarters: Shanghai, China; Chairman: Zhou
Jie; hereafter, “Shanghai Pharmaceuticals Holding”). Tsumura signed the agreement on May 6, 2016, thereby
enabling it to enter the business of traditional Chinese medicine compound granules.

1. Purpose of establishing the joint venture
Most traditional Chinese medicines*1 in China are crude drug pieces for decoction. In recent years,
however, the preparation of traditional Chinese medicine compound granules*2 has become widespread. It isbelieved that demand for these granules has grown among medical institutions and patients partly because theyare easy to carry and take, and partly because they have a long storage life.

Tsumura established SHENZEN TSUMURA MEDECINE CO., LTD. in 1991 as its base in China for theprocurement, processing, and storage of crude drugs for Kampo formulation for prescription in the Japanesemarket. In 2001, the company established SHANHAI TSUMURA PHARMACEUTICALS CO., LTD., a joint
venture with Shanghai Traditional Chinese Medicine, to produce the extract powder used in the Kampo
formulation for prescription.

Tsumura will work to contribute to Chinese society and the health of the Chinese people by making use of
the expertise in research, technologies, quality control, and other elements related to the cultivation andprocessing of crude drugs it has developed in China, as well as the manufacturing technologies for Kampo
extract, in the business of traditional Chinese medicine compound granules. The company agreed to establish
this new joint venture believing that it will lead to an even more stable supply of crude drugs to Japan, while
also helping to improve the quality of crude drugs in China and protect crude drug resources in the country.

The Tsumura Group will further improve the value of Kampo and ensure the stable supply of Kampo
products, aiming to be a value creating company that contributes to people’s health through Kampo.

*1: Traditional Chinese medicines
Traditional medicines used in China*2: Traditional Chinese medicine compound granules
A single crude drug is extracted from crude drug pieces for decoction, made into a
product through a series of processes that consists of separation, concentration,
drying, and granulation, and used for preparation of a drug in the same way as crude
drug pieces for decoction.

2. Outline of the joint venture
Name of company: SPH TSUMURA PHARMACEUTICALS CO., LTD.
Location: Shanghai
Representative: Chairman (To be determined in May)
Capital: 600 million RMB
Investment ratio: Shanghai Traditional Chinese Medicine: 51%, Tsumura: 49%
Business description: Manufacturing and sales of traditional Chinese medicine compound granules,
establishment of criteria for traditional Chinese medicine compound granules, research and development ofproducts, research and development of manufacturing methods, and other operations.

3. Joint venture partner
Name of company: Shanghai Traditional Chinese Medicine Co., Ltd.
Location: Shanghai
Representative: Chen Junli, Chairman & CEO
Capital: 648 million RMBParent company: Shanghai Pharmaceuticals Holding Co., Ltd.
Location: Shanghai
Representative: Zhou Jie, Chairman
Capital: 2,688 million RMBBusiness performance in 2015: Net sales: 105,500 million RMB, Net income: 2,800 million RMB
Major shareholders: Shanghai Industrial Investment (Holdings) Co., Ltd., Shanghai Shangshi (Group) Co.,
Ltd., and Shanghai Pharmaceutical (Group) Co., Ltd.
Listed in: Shanghai Stock Exchange, Hong Kong Stock Exchange

4. Impact on the business performance
The establishment of the joint venture will have a minor impact on Tsumura’s business performance for theterm ending March 2017.