November 1, 2005
TNSC to Acquire Management Control
of Nippoku Sanso K.K.

The managements of Taiyo Nippon Sanso Corporation (TNSC)
and the Sapporo-based company Nippoku Sanso K.K. recently
reached a preliminary agreement on the transfer to TNSC of
87,000 shares of Nippoku Sanso (equivalent to 58.2% of all
issued stock). This share transfer, if effected, would
give TNSC management control over Nippoku Sanso.

Under the preliminary agreement, TNSC will acquire
all shares in Nippoku Sanso held by its president, Mr.
Masahiro Iwasaki, and his family members, by mid-2006.
According to current plans, TNSC will put its own
management team in place at the helm of Nippoku Sanso by
the end of calendar 2005.

1. Background to Management Acquisition
Nippoku Sanso K.K., an industrial gas manufacturer
supplying customers in Japan’s northernmost main island of
Hokkaido, has pursued a course of steady management ever
since its establishment in 1929 by the Iwasaki family.
Nippoku Sanso began purchasing cutting and welding gases

and related equipment from Nippon Sanso, and from Taiyo
Toyo Sanso, more than forty years ago, and this business
relationship has now assumed considerable significance
within TNSC’s overall operations.

Against this background, and in view of his advanced
age and the absence of an heir to the business, President
Masahiro Iwasaki approached TNSC with the offer to sell
the shares in Nippoku Sanso held by himself and his
family, thereby transferring ownership and control to the
Company.

2. Future Objectives Following Acquisition of Control
TNSC intends to appoint its own staff members to all
management positions (including president) at Nippoku
Sanso K.K. The company’s business is in a fundamentally
sound condition, and we intend to continue business
operations as hitherto, with the exception that Nippoku
Sanso will be a member of the TNSC Group. It will
therefore be able to take advantage of the know-how in
various fields of specialist gas technology possessed by
TNSC Group companies, and to leverage this expertise to
offer its industrial customers in Hokkaido an even higher
level of service.

3. Outline of Nippoku Sanso
Name: Nippoku Sanso K.K.
Head office: 16-6-1, Higashi 1-jo, Tsukisamu, Toyohira-ku,
Sapporo, Hokkaido
Representative: Masahiro Iwasaki, President
Paid-in capital: ¥80,000,000
Annual sales (FY2004): ¥1,506 million
Employees: 52