November 8, 2012
NEWS RELEASE
Name of Listed Company

Tsumura & Co.

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

Head of Corporate
Communications Dept.
Telephone: 81-03-6361-7100

Tsumura Develops Medium-Term Management Plan for FY2012 to FY2015
Aiming to Become a Value-Creation Company Contributing to Public Health with Kampo

Tsumura & Co. (“Tsumura”) has recently developed its medium-term management plan for fouryears (fiscal 2012 to fiscal 2015), based on its long-term management vision (Vision 2021) “Aiming tobecome a value-creation company contributing to the health of people with Kampo.”
Tsumura regards this new medium-term management plan as the first medium-term management
plan to realize Vision 2021 and has adopted a theme of “strengthening the basis for growth to createvalue.” Tsumura has also targeted the following three objectives as specific strategic challenges: theexpansion of the ethical Kampo formulation market in Japan, cost restructuring through theintroduction of new production technologies and other means, and increasing corporate value throughthe execution of financial and capital policies. Tsumura will strive to achieve sustainable growth bypursuing these strategic challenges with the new medium-term management plan as a milestone torealizing Vision 2021.
Tsumura has been aiming to establish a strong presence in the field of medicine by making
maximum use of its distinctiveness as a Kampo medicine manufacturer by focusing on this area. Morespecifically, Tsumura has been enhancing the provision of information about Kampo medicine andKampo preparations by holding seminars, lectures, research seminars, and briefings for medicalinstitutions, among other activities. In addition, Kampo preparations have been steadily earning higher
recognition in professional territories, given that strong evidence is being established thanks toprogress in clinical research based on multicenter double-blind group-comparison tests and basic
studies that support the effect of the clinical research. As a result, treatment using Kampo preparations
are adopted for diseases in various fields, and sales volumes of Kampo formulations for prescription
continue to increase steadily.

At the end of June 2012, Tsumura made a new start to follow and further evolve its management
policies under a new management structure. Tsumura will pursue a number of initiatives to ensure thatits management embodies its corporate philosophy, “The best of nature and science,” as theunalterable basic value that the Tsumura Group should pursue, and its corporate mission, “Contributing
to the availability of medicines of unprecedented quality by combining Kampo and Western medicine,” asthe goal that will continue to exist and be required by society, as its basic philosophy.
As the leading ethical Kampo formulation manufacturer, Tsumura will continue to make concerted
efforts under its new medium-term management plan, with the aim of becoming a value-creationcompany that contributes to public health with Kampo in anticipation of growing medical needs
associated with an increase in the aging population, stronger treatment needs for women’s diseases
accompanying an increase in the female lifelong working population, and future medical practice inJapan where the role of primary care will only continue to increase.
1. Basic Philosophy
 Corporate philosophy“The best of nature and science”
 Corporate mission“Contributing to the availability of medicines of unprecedented quality by combining Kampo
and Western medicine”
Constituting the Company’s basic philosophy, the corporate philosophy and the corporate
mission are permanently shared throughout the Tsumura Group, and they form the basis for
the Group’s approach to management.

2. Long-Term Business Vision: 2021 Vision Aiming to become a value-creation company contributing to public health with Kampo
Tsumura with a focus on Kampo
We will contribute to the creation of medical care practices to ensure that patients in Japan canreceive medical treatment, adopting Kampo medicine as needed at any medical institution andat any department.

Tsumura with a focus on people
In the Kampo business, which has no model to serve as precedent, we will create a new pathon our own with the aim of becoming a group of companies consisting of people who are trustedby all.
Tsumura with a focus on global niche markets
Harnessing our own technologies and expertise, we will seek to expand into new businesses bylaunching TU-100 Daikenchuto onto the U.S. market and enhancing the quality of crude drugs inChina.3. Medium-Term Management Plan (for FY 2012-2015)
 Strengthening the basis for growth to create value(i) Expansion of the Kampo market
Expansion of the ethical Kampo formulation market in Japan(ii) Boosting of earnings capacity
Achieving cost restructuring with the introduction of new production technologies, etc.
(iii) Financial and capital policies
Increase in corporate value through the execution of financial and capital policies

4. Targeted figures
Target for FY 2015 (ending March 2016)
Net sales

123.0 billion yen

Operating profit

29. 5 billion yen

Operating profit margin24%Net income

19.0 billion yen

EPS

269 yen

ROE

14%

5. Policy on Return to Shareholders- We will strive to increase our corporate value by investing in the sustainable development andgrowth of the Kampo medicine.
- We will pay consistent dividends in consideration of medium- and long-term profit levels.
- We will consider the flexible acquisition of treasury stock.

6. Strategic Challenges(i) Expansion of the Kampo market: Expansion of the ethical Kampo formulation market in Japan<Japan>We will pursue a number of initiatives to attain the 2021 Vision, which aims to help create
medical care practices to ensure that patients in Japan can receive medical treatment using
Kampo medicine as needed at any medical institution and at any department.
- Monitor the use of Kampo formulations on a doctor-by-doctor basis and tailor promotional
activities to the situation.
- Expand strategic formulae at university hospitals, designated hospitals for clinical training,other hospitals, and clinics.
- Provide support for enrichment of Kampo medicine education at university faculties ofmedicine and designated hospitals for clinical training.
- Actively organize seminars, lectures, research seminars, and briefings for medical institutions
on Kampo medicine.
- Push ahead with clinical research based on multicenter double-blind group-comparison tests andbasic studies that support the effects of the clinical research and establish high-qualityevidence.
・Carry out promotional activities based on the evidence in addition to the presentation ofresearch findings at academic conferences and in academic papers.

<Overseas> Develop TU-100 Daikenchuto in the United States.
- Establish a scientific quality assessment method for TU-100 Daikenchuto.
- Implementation of the Phase II test on TU-100 Daikenchuto.

(ii) Boosting earnings capacity: Achieving cost restructuring with the introduction of new production
technologies, etc.
We will push ahead with cost restructuring by introducing innovative new production
technologies and streamlining the production of crude drugs to build a foundation helpful to thefuture reduction of the cost of sales margin. We will also aim to further slash the ratio of selling,
general, and administrative expenses.
- Review ongoing cost-cutting measures that can absorb a rise in depreciation and other costs andachieve cost savings.
- Construct a new production system that leads to labor saving and strengthen the operating
structure.
- Boost the efficiency of crude drug production by expanding our company-controlled farms*.
- Develop crude drug cultivation technologies and bring them into production.
- Increase sales efficiency through evidence-based promotional activities.

* Company controlled farm
A farm where we can give direct cultivation guidance and where we monitor the cost of cultivation so that wecan set purchase prices based on it (including any such farm controlled by a partner company)(iii) Financial and capital policies: Increase in corporate value with the execution of financial andcapital policies<Financial and capital policies>
We will strive to increase boost by sustaining the growth of Kampo formulations for prescription
and by cost restructuring.
In addition, we will improve the control of crude drug inventories and capital efficiency andrevise non-business assets, including certain securities, to increase asset efficiency.
<Human capital policy>
In the Kampo business, which has no model to use as precedent, we will develop professional
human talent that will be capable of independently opening up new pathways. Through theKampo business, including the cultivation and processing of crude drugs, we will provide
increased job opportunities for those with disabilities and elderly people and for crude drug
cultivators in Japan, China, and Laos to ensure diversity in the Tsumura Group’s unique humannetwork.

<Environmental capital policy>
Kampo formulations are made chiefly of plant-derived crude drugs. Regarding the naturalenvironment of the crude drug production sites in different countries as important capital, we
conduct business management and implement our own environmental capital policies, including
research for the sustainable procurement of crude drugs and environmental conservation actions.
Also working on the recycling of crude drug residues, we will be making efforts across the Groupto develop a cyclical structure based on nature itself.

[Notes on forward-looking statements]• The targeted figures under the medium-term management plan provided in this document merely suggest our futureorientation and do not constitute official results forecasts. For official results forecasts, please refer to data disclosed in theannual financial summary pursuant to the Tokyo Stock Exchange Regulation.
• Materials and data provided in this presentation include so-called forward-looking statements. These are subject to various
risks and uncertainties. Please note that actual results may differ materially from forecast figures.
• In the event of a revision to the medical insurance system, drug prices, or other health care administration by Japanese
and/or other governments, or of fluctuations in interest and foreign exchange rates, our financial results and standing maybe affected.
• In the event of the suspension of sales or a substantial sales decline of any currently marketed mainstay product for reasonsof product defect, unexpected side-effect, or suchlike, our financial results and standing will be severely affected.