Yamatake negotiating the establishment of joint venture in Saudi Arabia to expand valve business with aid of Saudi capital

January
31, 2012

TOKYO, January 31, 2012 - Yamatake Corporation, a member of the azbil Group, announced today that to extend its international business and expand its Advanced Automation Co. business in Saudi Arabia, it is negotiating the establishmenet of a joint venture company in that country with Tharawat Development Co. The joint venture would manufacture and sell control valves, sell Yamatake's process automation and factory automation products, and provide engineering and related services. Agreement to begin formal negotiations was reached today.

The new company under discussion would be founded by autumn of 2012 and would start the construction of its factory, with production to start in autumn of 2013. Production would begin with the assembly of large-bore control valves, and would expand to the lifecycle solution business in the future. In addition to product sales within Saudi Arabia, the export of products to neighboring countries is planned.

Tharawat Development Co. deals in investment and business development in areas ranging from industry to real estate. Its previous investments include a petrochemical plant, and the company is well known among plant owners and plant-manufacturing engineering companies in Saudi Arabia.

The new company would be capitalized at 200 million Japanese yen, with Yamatake having a 51% investment share and Tharawat having a 49% share. Sales of 1 billion Japanese yen could be expected for 2014. The proactive hiring of Saudi nationals is under consideration, with the goal of entrusting future operations to local employees. For that purpose, the training of key personnel is already underway in Japan.

Establishment of the joint venture has the support of the Japan-Saudi Arabia Industrial Cooperation Task Force, whose main activity is to assist Japanese companies considering investment in Saudi Arabia. On February 1, at the Japan-Saudi Arabia Industry Cooperation Forum in The Prince Park Tower Tokyo, a letter of intent will be officially signed.

Yamatake, guided by the azbil Group's philosophy of human-centered automation, continues to strengthen its ability to deliver solutions at customers' work sites, both in Japan and overseas, to realize safety, comfort, and fulfillment in people's lives and contribute to global environmental preservation.

(From left to right, Mr. Al-Hashem,

Vice Chairman & Managing Director of Tharawat Development Co.

and Mr. Seiji Onoki, President of Yamatake Corporation)