NACHI-FUJIKOSHI CORP.

Capitalizing on its advantages of its products’ characteristics (i.e. energy efficient, compact sizes and high-power), Nachi-Fujikoshi has firmly positioned itself in the hydraulic equipment industry focusing on the fields of general industrial machinery (45% of hydraulic product market), construction machinery (40% of hydraulic product market) and control valves in automobile equipment (15% of hydraulic product market).
In the area of general industrial machinery, Nachi-Fujikoshi enjoys the largest market share of solenoid valves for machine tools and standard hydraulic products. Especially in recent years in the market for solenoid valves, the company can meet increasingly brisk demands from the machine tool industry due to the increased production capacity of its newly-built plant in April 2004. In the area of press machines, Nachi-Fujikoshi introduced the “Power Meister” in 2003 that was an energy efficient hydraulic product with a built-in AC servomotor. It is clear that the company has been playing a leading role in the industry.
In the area of construction machinery, Nachi-Fujikoshi also enjoys the largest share of approximately 50% of the world’s market in supplying drive motors, swing motors and piston pumps for the so-called mini-construction equipment (less than 6 tonnes). The products are supplied to most of the mini-construction machine makers and are highly evaluated.
The total sales of hydraulic products in fiscal year 2006 is estimated to be at least 36 billion yen, a 12% increase from the previous term. This is due to the expanded market of hydraulic products for general industrial machines and mini-construction machinery.

In 2005 and 2006, Nachi-Fujikoshi has focused its efforts in building an extension to the Higashi-Toyama facility, reinforcing the production facilities and promoting robotization. In order to meet increasing demands from its customers, it plans to build a new plant in the Namerikawa facility aiming to expand and improve its production capacity, so that it will be able to expand the hydraulic business for mini-construction machinery.

• A new facility for hydraulic motor production will be built at the Namerikawa Plant. The target is to develop a 16,000-unit-per-month drive motor production system (1.6 times more than present) through intensive and strengthened production facilities while promoting robotization and automation.
• The new plant area will be 16,100 square meters (140 meters by 115 meters) that will be nearly the same size as the pump motor plant in the Higashi-Toyama Plant. The plant area will be large enough to produce 20,000 motors per month to meet any future increase in production.
• The plant will be divided into blocks including machine processing, assembly and inspection, painting and packing, parts and materials yard and distribution warehouse. It will be designed so that the workers can easily see the operational status, processes in progress and stock. This will shorten lead time and decrease the volume of inventory.
• We are planning to introduce in-house production of essential parts that determine quality and function, so that we will be flexible in responding to the changing demands of the customers and to strengthen our quality assurance system.