Kawasaki Safety Service Forms Business Alliance with Air Water

 On July 31, Kawasaki Heavy Industries, Ltd. (Kawasaki), its subsidiary Kawasaki Safety Service Industries, Ltd. (KSSI) and Air Water Inc. reached a basic agreement that will bolster the business relationship between KSSI and Air Water.

 In accordance with the agreement, Air Water and KSSI concluded a wide-ranging business alliance on October 1 to facilitate development, production, sales and provision of services for the healthcare business including medical equipment and medical facility construction. On the same day Kawasaki sold 3.45 million of its holding KSSI shares, or 33 percent of KSSI's outstanding shares, to Airwater.

 With Air Water's medical business centered on supply of gases for medical purposes, the company has expanded their portfolio to include the medical equipment and service fields. KSSI has a strong background in three fields. Medical equipment such as equipment for supplying gases for medical purposes, breathing apparatus used in combating fires and lifesaving and firefighting equipment used on land and at sea. Both companies have a long business history together and KSSI is an OEM supplier to Air Water.

 Under the agreement both companies intend to maximize business opportunities in the healthcare field by combining their technological prowess with Air Water’s formidable nationwide sales and service network. The agreement enhances collaboration in Air Water’s industrial businesses and KSSI’s safety equipment business to expand beyond healthcare related products.

 The three companies estimate that the agreement will cause no material impact on their financial results on a consolidated basis for the fiscal year ending March 31, 2004.