NACHI-FUJIKOSHI CORP.

Nachi-Fujikoshi Group will strengthen its supply system for utility (small construction machinery) makers in order to build a firm position as a top-level hydraulic equipment maker in the global utility construction sector. Under the plan, the company will develop a system to supply rotary center joints in addition to hydraulic drive motors, swing motors, and piston pumps, emphasizing the supply of these products as one set.
As a part of this plan, a new plant will be built at Nachi Tohoku Seiko in Yamagata Prefecture that is a major manufacturing base of hydraulic equipments for the Group. This will expand production lines of rotary center joints to meet the growing demands for utility construction equipment.

• Rotary center joint is a precision hydraulic device (i.e. rotating hydraulic joint) that can smoothly and efficiently circulate hydraulic fluid without any loss at any swing angle of the cockpit (operator’s seat). This is due to joining the gap between the hydraulic pump in the cockpit that can rotate 360 degrees, and the hydraulic motor in the crawler.

Nachi-Fujikoshi has concentrated its hydraulic equipment business mainly in the general industrial machinery sector such as machine tools and press machines and in the automobile manufacturing sector, as well as the utility construction sector. In recent years, its business has rapidly expanded to become the major sales force in the group.
In particular, their energy efficient and compact hydraulic machinery have exhibited strong competitiveness in the utility construction sector. With drive motors (50% global market share), swing motors and piston pumps as major products, the company enjoys a dominant position in the global market.
In the autumn of 2007, a new drive motor plant was built at the Namerikawa Plant to expand and improve productivity for further business achievements.

• Outline of capital investment
• Plan to double the production capacity of rotary center joints by 2010 30,000 units per year (25% global share) in 2006 to 50,000 units by 2008, and 60,000 units by 2010 (40% projected global share)

• Outline of the capital investment
• Plan to increase dive motor production capacity by 1.6 times by 2008
  120,000 motors per year in 2006 (50% global share) to 200,000 units in 2008 and to 240,000 units in 2010 (over 70% projected global share.)
• With a new facility at the Namerikawa Plant (to be completed by September 2007), production capacity is planned to be increased by 160% by 2008, and 200% by 2010 through intensification and strengthening of the drive motor production facilities as well as promotion of robotization and automation.

Nachi Fujikoshi Group aims to increase its hydraulic equipment sales to 50 billion yen by 2010, 1.4 times that of the sales in 2006 (36 billion yen) by gradually expanding and strengthening the hydraulic equipment production system for such customers as utility construction equipment manufacturers. (In the case of Nachi Tohoku Seiko, the Group plans to increase sales to 8 billion yen by 2010, 1.8 times that of the 4.4 billion yen in 2006.)