KPM to Expand Main Factory to Produce Hydraulic Pump

Tokyo, March 3, 2008 — Kawasaki Precision Machinery, Ltd. (KPM) announced today that it will build a facility to manufacture hydraulic pumps for construction machinery at its main factory in Kobe in order to meet the increasing demand in the global market. KPM will also reorganize its main factory to enhance production capacity for various hydraulic products. Construction of the new facility will begin in April 2008, with a total investment of approximately eight billion yen. The new facility is scheduled to begin production in April 2009 and go into full operation in June 2009.

In light of anticipated demand for new types of hydraulic pumps, KPM will move its production line for these pumps to the new facility. It plans to install additional production equipment in the new facility in order to establish an integrated manufacturing system that will encompass everything from machining to assembly and operation. KPM will concentrate production lines for control valves along with new production equipment in the space that will become available in the existing facility after moving the production line for hydraulic pumps to the new facility. It also plans to install production equipment for hydraulic motors and core parts in their respective production facilities in order to increase the main factory’s overall production efficiency and KPM’s hydraulic product manufacturing capacity.

Overview of the New Facility

(1) Address: 234 Matsumoto, Hasetani-cho, Nishi-ku, Kobe, Japan
(2) Products: hydraulic pumps
(3) Production capacity: 48,000 units/year (scheduled as of June 2009)
(4) Total floor area: approximately 10,000 m² (bi-level structure)
(5) Number of employees: 100 (projected as of June 2009)