| Tokyo, September 21, 2006 — Kawasaki Heavy Industries, Ltd. announced today that it will strengthen its overseas operations by establishing two new offices and consolidating operations at four overseas locations as of January 1, 2007. The two new offices will be opened in Moscow, Russia and Delhi, India. Kawasaki's Southeast Asia offices in Bangkok, Kuala Lumpur and Jakarta will be consolidated into its subsidiary, Kawasaki Heavy Industries (Singapore) Pte. Ltd. The current Shanghai Office in China will be reorganized as a locally incorporated company providing business assistance and services mainly for Kawasaki's group companies. Kawasaki's restructuring of overseas operations is designed to strengthen the trailblazing role which overseas offices play in new markets. Dividing the global market into the four strategic blocks of America, Europe, China and Asia will enable Kawasaki to build on its regional bases as well as enhance the functions and efficiency of its overseas operations.
Russia and India are two BRIC countries that have enjoyed remarkable economic growth in recent years. Blessed with an abundance of natural resources, Russia's economy is expected to sustain this steady growth. Kawasaki will cultivate business opportunities by strengthening marketing research on the ground from its newly established office in Moscow, the political and economic heart of Russia. India, which boasts a thriving IT-driven service sector, will be focusing on the development of its manufacturing industry. Opening a new operational base in Delhi will enable Kawasaki's operating divisions to make further inroads into the Indian market.
Kawasaki operating divisions have already built strong business foundations within their respective fields in the Southeast Asian market through the support of its local offices. They are currently doing business in the local market within their own operational bases. Consolidating the operations of the four offices in this area within KHI (Singapore) will enhance the efficiency of operations.
The current Shanghai Office in China will be reorganized as a locally incorporated company in order to establish an organizational system that can flexibly respond to requests for support and services from Kawasaki's group companies operating in the area.
The new overseas offices and subsidiary will bolster Kawasaki's efforts to enhance its management efficiency and achieve its corporate vision of "Global Kawasaki" as it steps up its drive to develop overseas markets and boost its brand power.
Overview of Kawasaki's new overseas offices and subsidiary:
1. Overview of New Offices
 (1) | Moscow Office | | | (a) | Location: Moscow, Russia | | | (b) | Opening: January 1, 2007 | | | (c) | Operations: Market research, gathering prospective project information, support for KHI travelers and liaison services | | | (d) | Number of Employees: 3 (including 2 local staff members) |
| (2) | Delhi Office | | | (a) | Location: Delhi, India | | | (b) | Opening: January 1, 2007 | | | (c) | Operations: Market research, gathering prospective project information, support for KHI travelers and liaison services | | | (d) | Number of Employees: 4 (including 2 local staff members) |
2. Overview of New Subsidiary
| (a) | Name: Kawasaki Heavy Industries Consulting & Service (Shanghai) Company, Ltd. | | | (b) | Location: Shanghai, China | | | (c) | Capital: US$250,000 (approximately ¥28 million, wholly owned by KHI) | | | (d) | Opening: January 1, 2007 | | | (e) | Businesses: KHI's Shanghai Office functions, project support, support for starting local operations and business expansion follow-up service mainly in the East China area | | | (f) | Number of Employees: 7 (2 KHI transfers and 5 local staff members) | |
