November 30, 2017
NEWS RELEASE
Name ofTSUMURA & CO.

ListedCompany
RepresentativeTerukazu Kato
President & Representative Director(Code: 4540 First Section of the Tokyo

ContactStock Exchange)
Noboru Suzuki
Head of Corporate
Communications Dept.
Telephone:
81-3-6361-7100

Tsumura Announces Execution of Joint Venture Agreementwith Tianjin China Medico Technology Co., Ltd.

TSUMURA & CO. (hereinafter, “Tsumura”) announces that at a meeting held on November 30,
2017, its Board of Directors passed a resolution to conclude an agreement for the establishment of a
joint venture (hereinafter, the “Joint Venture Agreement”), in which two companies, namely Tsumura
China Inc. (hereinafter, “Tsumura China”), its wholly-owned subsidiary, and Tianjin China Medico
Technology Co., Ltd. (hereinafter, “China Medico”), will make investments.

1. Purpose of Execution of Joint Venture Agreement
As a main provider of raw material crude drugs for Kampo preparations in China, China Medico
has undertaken business with the Tsumura Group since it was established in 2011. Tsumura
concluded a comprehensive business collaboration agreement with the company on May 11, 2016,
jointly promoting business activities in the supply and procurement of raw material crude drugs,
research on crude drug cultivation and processing, quality control of crude drugs, management ofcrude drug production sites, and production of Chinese crude drug pieces for decoction (prepareddrugs in slices).
To address an increase regarding the amount of Tsumura-prepared Kampo products used in Japan,
Tsumura, while working on increasing future production capacity, has decided that it is reasonable tomove forward with collaborations with China Medico, a company that possesses a function toprocure raw material crude drugs for Kampo preparations and that has been conducting businesswith Tsumura under a relationship of trust. Based on this decision, Tsumura has entered into anagreement with China Medico to establish a joint venture company in Tianjin, China, that will be
responsible for the production of Kampo extract powders that are intermediates for Kampo
preparations.
Tsumura positions its strategy of “Taking on the challenge of new businesses in China” as one of
the most important strategic challenges in the “New Medium-Term Management Plan (Fiscal 2016 –Fiscal 2021) announced in May 2016, promoting businesses with a view to contributing to publichealth in China, which is the main country from which Tsumura procures its raw material crude
drugs for Kampo preparations. Looking to the future, Tsumura will consider entering the business of
producing and selling traditional Chinese medicines in China through the Joint Venture Company.
The Joint Venture Agreement will be concluded subject to obtaining approval at a general meetingof shareholders of China Medico to be held on December 20, 2017.
2. Outline of the Joint Venture (planned)(1)

Name of Company

TSUMURA SHENGSHI PHARMACEUTICALS CO., LTD.

(2)

Location

Tianjin, China(3)

Representative

Gang Li, Chairman
Production of Kampo extract powders that are intermediates for Kampo(4)

Business Description

preparations, traditional Chinese medicinal drugs, and traditional Chinese
medicine extract powders.
400 million RMB(5)Capital(6)Date of Foundation

January, 2018 (Plan)(7)

Fiscal-year End

December 31 every year

(8)

Investment Ratios

Tsumura China: 70%, China Medico: 30%(Approximately 6.76 billion yen)

1RMB=16.91 JPY

3. Outline of Tsumura China(1)

Name of Company(2)

Location(3)Representative(4)

Business Description

Tsumura China Inc.
Area A, 2nd Floor, Building 5, 276 Guo Shou Jing Road, China (Shanghai)
Pilot Free Trade Zone
Koin Toda, Chairman
Business management of Tsumura Group companies in China andoperations incidental to it(5)Capital

300 million RMB(Approximately 5.07 billion yen)

1RMB=16.91 JPY

4. Joint Venture Partner(1)(2)

Name of Company
Location

Tianjin China Medico Technology Co., Ltd.
Room 206, 2nd Floor, No. 18, Gaofu Rd, Binhai Science Park, Binhai
New Coastal Area, Tianjin, China(3)

RepresentativeGang Li, Chairman(4)

Business Description

Procurement, processing and sales of crude drugs(5)

Capital(6)Date of Foundation

29 million RMB(Approximately 490 million yen)

1RMB=16.91 JPY

July 13, 2011

Major Shareholder(7)

and Shareholding

Gang Li (Chairman of China Medico)

65.82%

Ratio(8)

Relationship Between
the Parties
Capital Relationship
Personal Relationship

There is no relationship to be disclosed between the parties.
The Company dispatches one executive officer to the concerned party as adirector.

Transactional

The Company mainly procures raw material crude drugs for Kampo

Relationshippreparations from the concerned party.

Status as RelatedParty

The concerned party does not fall under the related parties of theCompany. The related parties and affiliates of the concerned party also do
not fall under the related parties of the Company.

5. Date(1)Resolution of the Board of Directors

November 30, 2017(2)Date of the conclusion of the Joint Venture Agreement

December 20, 2017 (Plan)(3) Establishment date of the joint venture

January, 2018 (Plan)

6. Impact on Financial Results
The establishment of the joint venture company has only a minor impact on Tsumura’s
consolidated financial results for the fiscal year ending March 31, 2018.