Absorption Chiller/Heater JV to Launch in China

 Tokyo, May 13, 2005 – Kawasaki Thermal Engineering Co., Ltd. (KTE) announced today that KTE and Tsinghua Tonfang Artificial Environment Co., Ltd., a leading air conditioning system manufacturer in China, have agreed to establish a joint venture. Tonfang Kawasaki Air-Conditioning Co., Ltd. will manufacture, sell and service absorption chiller/heaters in China.

 Propelled by China's rapid economic growth and booming construction industry, the market for air conditioning systems has been enjoying a hefty expansion in recent years. Due to the energy-saving performance of absorption chiller/heaters, demand in China has outstripped that in Japan. With further growth anticipated, KTE plans to cultivate a significant market presence in China with its cutting-edge Sigma Ace Series.

 Tsinghua Tongfang Artificial Environment, a company under the umbrella of Tsinghua Holdings Co., Ltd. established by Tsinghua University, is a fast-growing manufacturer with a recognized brand and sales support from the Tsinghua group. KTE's technological superiority as the first developer of absorption chiller/heaters in Japan, combined with its Chinese counterpart's extensive sales network, gives the new venture a head start in its quest to penetrate the market and contribute to the energy-savings initiatives being promoted by the Chinese government.