Kawasaki Begins Joint Venture for Heat Recovery Power Generation Engineering in China

Tokyo, October 19, 2006 ― Kawasaki Plant Systems, Ltd. announced today that it has reached an agreement with Anhui Conch Venture Investment Co., Ltd., of the China’s Anhui Conch Group, to establish the Anhui Conch Kawasaki Engineering Co., Ltd., a joint venture for the design, procurement and production of waste heat recovery power generation systems for cement plants.

 This joint venture will enable Kawasaki to leverage its advanced waste heat recovery power generation technology on the strong foundation of trust established by Anhui Conch Venture Investment ’s within the Chinese cement industry. Kawasaki plans to combine its know-how with the procurement and operational knowledge Anhui Conch has of the local market to make vast inroads with waste heat recovery power generation systems that will lead China toward its goal of conserving energy and protecting the environment.

 The waste heat recovery power generation system to be sold through this joint venture is capable of recovering approximately 9,000 kW for a cement production facility with a daily output of 5,000 tons. This will lead to an annual power savings of some 500 million yen and a reduction of CO2 emissions of approximately 70,000 tons per year. Demand for such systems is expected to rapidly increase in China which is currently promoting policies geared toward protecting the environment and building facilities that conserve energy as well as consolidating cement production facilities.

 Kawasaki has been continuously receiving orders for waste heat recovery power generation systems for cement plants in Japan, Taiwan, Vietnam, Korea, India and China since 1980 and enjoys about a 50% share of the global market. Anhui Conch Cement, an affiliate of Kawasaki’s joint venture partner, the Anhui Conch Group, is China’s largest and the world’s fourth largest cement company. Kawasaki has built up a proven track record, with 12 orders for heat recovery power generation systems from Anhui Conch Cement already under its belt.

 Anhui Conch Cement is not only an affiliate of Kawasaki’s joint venture partner but is expected to be the largest customer of the joint venture with a high prospect for future orders. Anui Conch Cement’s leading and influential position in the Chinese cement industry is likely to have a domino effect on promoting the use of waste heat recovery power generation systems throughout China.

 Kawasaki will seize this opportunity to market waste heat recovery power generation systems for cement production facilities not only in China but other countries and regions as well, with the new venture company serving as the base for designing, procurement and production operations.

Overview of Joint Venture