Kawasaki Invests in Expanding Environmental and Energy Efficient Equipment Business in China

Tokyo, May 22, 2008 — Kawasaki Plant Systems, Ltd. announced today that Anhui Conch Kawasaki Energy Conservation Equipment Manufacturing Co., Ltd. (CKM) will start production of cement plant components such as highly efficient vertical cement mills and AQC boilers for waste heat recovery power generation systems. CKM is a joint venture established in 2007 between Kawasaki and the Chinese Anhui Conch Group, the parent company of Anhui Conch Cement Company Limited, the fourth largest cement maker in the world. CKM will also start production and sales of environmental systems including gasification systems for waste recycling and sewage treatment systems. In order to manufacture these products, CKM is constructing two new production facilities to augment its first 27,000 m² plant currently in operation. The second and third plants measuring 18,000 m² and 27,000 m² respectively will be constructed with a total investment of approximately 3 billion yen.

The gasification system is designed to gasify municipal refuse which can be used to fuel a cement kiln. It is an energy-saving, earth friendly system that turns waste into energy. Since the system can be added to an existing cement plant, it significantly cuts costs compared with constructing a complete waste treatment plant. This development marks Kawasaki's entrance into China's environmental equipment field with the production and sales of gasification systems and sewage treatment systems.

Kawasaki launched Anhui Conch Kawasaki Engineering Co., Ltd. (ACK) jointly with the Anhui Conch Group in 2006 to design, procure and sell waste heat recovery power generation systems for cement plants. The two companies also established CKM in 2007 to manufacture PH boilers for waste heat recovery power generation systems for ACK. Business has been buoyed by Chinese policy initiatives aimed at promoting environmental and energy efficient facilities. Kawasaki has been enjoying a steady stream of orders for cement plant waste heat recovery power generation systems in China, with the bulk of these orders coming from the Anhui Conch Group. ACK received orders totaling some 40 billion yen in 2007.