February 2, 2005
Dia Reiki Kogyo Co., Ltd.
Nissan Kogyo Co., Ltd.

Two Subsidiaries of TNSC to Merge in April
Taiyo Nippon Sanso Corporation (TNSC) hereby announces
that two of its subsidiary companies — Dia Reiki Kogyo
Co., Ltd., headquartered in Sakai City, near Osaka, and
Nissan Kogyo Co., Ltd., of Yokohama — are scheduled to
merge with effect from April 1, 2005.

Following the merger, construction will begin on a
new manufacturing plant for cryogenic gas equipment, to be
built on a plot of land within the grounds of the Sakai
facilities of TNSC. The start of operations at the new
plant is envisaged for December 2005.

This merger is part of an overall strategy for the
next three years, mapped out by TNSC president Hiroshi
Taguchi, aimed at realizing the maximum synergy from the
recent merger between Nippon Sanso and Taiyo Toyo Sanso by
optimizing efficiency through the amalgamation of
affiliated companies.

Background to Merger
A major reorganization is taking place in the industrial
gases industry, whose members constitute the customers of
the two companies to be merged. Severely increased
competition is forecast as a result, and the decision to

merge the two companies was taken as a means of achieving
the critical mass that would enable more efficient
deployment of management resources. This, in turn, will
realize synergistic benefits that will translate into
greater competitiveness in both technological development
and cost-performance. Such effects would not only enable
the merged entity to offer its customers an improved
service, they are also judged necessary in order for the
new company to make a sufficient contribution to the
consolidated earnings of the Taiyo Nippon Sanso
Corporation group.

The two companies share common products and
technologies, including cold evaporators and dedicated
tank trucks for the transport of liquefied gases.
Additionally, they also possess products and technologies
unique to themselves. For example, Dia Reiki Kogyo boasts
a lineup of small refrigerated containers for industrial
gases and also for special gases used in the biotechnology
and medical fields. For its part, Nissan Kogyo produces
unique evaporators and other LPG- and LNG-related
equipment.

The fusion of the two sets of proprietary
technological expertise boasted by the two companies is
sure to lead to an expansion of their combined lineup of
unique products. The management of TNSC is confident that
this will put the new company in an unrivalled position

within the Japanese market for gas-related cryogenic
equipment.

Purposes of Merger

To realize the merits of scale in respect of the
efficient and effective allocation of management
resources, as well as the realization of synergistic
effects from the combination of the business lines of
the two pre-merger companies

To create an enterprise unique in the Japanese market
in terms of the technological expertise it possesses
and its product lineup

To attain higher productivity and profitability through
the use of cutting-edge equipment at a new purpose-
built factory, achieving higher operating efficiency
for the merged entity than for the two separate
companies at present

Schedule and Details of Merger
Date: April
1,
2005
Trade name:
Cryo One Inc.
Head office:
2-8 Chikko-Shinmachi, Sakai City, Osaka
Prefecture (upon merger; address is
current office and factory of Dia Reiko
Kogyo). The combined entity will
relocate to the new address shown

below, also in Sakai City, upon
completion of the new factory.
Representatives:
President and Representative Director:
Kiyonori Okumura (currently president of Dia Reiki
Kogyo)
Executive Vice President and Representative Director:
Ken’ichi Hamachi (currently president of Nissan Kogyo)

Management Goals and Plans of Newly Merged Company
Goals

To become the leading East Asian company in its
industrial niche in terms of technological expertise,
product quality, and cost-competitiveness

To possess a lineup of products in the cryogenic gas
equipment field unmatched by any other company in Japan

Management policies
Optimization of merger effects

To lower production costs

To bolster capabilities in technological research,
product development, and production capacity through
integration of the management resources of the two
founding companies

To raise marketing power thanks to the more impressive
combined lineup of technologies and products, leading
to increased sales

To achieve higher productivity (and profitability)
through the use of state-of-the-art production
facilities

Construction of cutting-edge plant for the manufacture of
cryogenic gas equipment
Location:
Ohama-Nishimachi, Sakai City (within grounds
of Sakai facilities of parent company TNSC)
Scheduled date of completion: October 2005
Scheduled start of operations: December 2005

Sales projections for three years down the line
Sales for fiscal 2007 are projected at ¥3.2 billion.