Hydraulic Components Subsidiary Established in US

Dec. 26, 2005

 Tokyo, December 26, 2005 – Kawasaki Precision Machinery Ltd. (KPM) announced today that it will establish a subsidiary to sell hydraulic components in the US on Jan. 1, 2006.

 KPM has been selling hydraulic components through the sales division of Kawasaki Motors Corp., U.S.A., a subsidiary of Kawasaki Heavy Industries, Ltd., KPM's parent company. Sales in the US have nearly quadrupled in the 10 years since its launch.

 The new subsidiary, Kawasaki Precision Machinery (U.S.A.), Inc., based in Grand Rapids, Michigan, is expected to enhance KPM's managerial decision-making processes and resource allocation. It will also expand its sales and service capabilities, as well as expanding its customer base and business in the US, where demand for hydraulic machines is expected to remain brisk in coming years.

 KPM plans to fully utilize three major bases: its headquarters and main factory in Kobe, Japan; KPM (USA); and KPM (UK), its production and sales subsidiary in Europe. Together with subsidiaries Flutek, Ltd. in Korea and KPM (China), which begins operations in August 2006, the bolstered KPM is now poised to effectively meet customer needs worldwide and further enhance customer satisfaction.

Company Profile
Name: Kawasaki Precision Machinery (U.S.A.), Inc.
Location: 5080 36th Street S.E., Grand Rapids, Michigan 49512, U.S.A.
President: Kazuo Hida
Established: January 1, 2006
Paid-in Capital: US$ 5 million (100% owned by KPM)
Principal businesses: Import and sales of hydraulic components (pumps, motors and valves), after-sales services and related businesses
Number of employees: 20