2012-08-20

Tsubaki to Establish New Subsidiaries

In order to expand its business in the fast-growing Indonesian market, Tsubakimoto Chain Co. ("Tsubaki") has decided to establish a sales subsidiary (PT Tsubaki Indonesia Trading) and a manufacturing subsidiary (PT Tsubaki Indonesia Manufacturing) in Jakarta.

Purpose

Tsubaki has been selling its products in the Indonesian market through its wholly owned subsidiary, Tsubakimoto Singapore Pte. Ltd. (located in Republic of Singapore, President: Yasushi Ohara). In 2011, Tsubaki Singapore opened a representative office in Indonesia and undertook a thorough market survey. As a result of this effort, Tsubaki has decided to establish a sales company in Indonesia to market all products of the Tsubaki Group including chains, mechanical components, and material handling systems. This will enable the company to further strengthen sales and technical services while establishing a closer relationship with customers. In addition, by creating a manufacturing subsidiary for materials handling systems, Tsubaki aims to develop a production system capable of supplying customers with products that meet local needs in a timely manner.

Tsubaki's growth strategy includes a commitment to expanding business in Indonesia, a market that is expected to experience strong economic growth. Establishing sales and production bases in this market will enable Tsubaki to grow its business while contributing to stronger penetration of the Tsubaki brand.

Outline of the New Companies

1. PT Tsubaki Indonesia Trading (sales subsidiary)
   1. Trade name:
      PT Tsubaki Indonesia Trading
   2. Location:
      Jakarta, Republic of Indonesia
   3. Planned date of establishment:
      September 14, 2012
   4. Principal businesses:
      Sales of general industrial parts (chains, power transmission equipment, components, etc.), materials handling systems, and machinery
   5. Fiscal year-end:
      December 31
   6. Planned number of employees:
      7
   7. Capital:
      US$520,000 (85% from Tsubakimoto Singapore, 15% from Tsubakimoto Chain)
2. PT Tsubaki Indonesia Manufacturing (manufacturing subsidiary)
   1. Trade name:
      PT Tsubaki Indonesia Manufacturing
   2. Location:
      Jakarta, Republic of Indonesia
   3. Planned date of establishment:
      September 14, 2012
   4. Principal businesses:
      Manufacture of materials handling systems and machinery
   5. Fiscal year-end:
      December 31
   6. Planned number of employees:
      30
   7. Capital:
      US$12,400,000 (85% from Tsubakimoto Singapore, 15% from Tsubakimoto Chain)
   8. Plant outline
      • ŸSite:
        Karawang Industrial Estate, Karawang province, Indonesia
      • ŸSite area:
        44,000 square meters
      • ŸPlanned start of operations:
        February 2015
        (In February 2013, the company will begin operating at a temporary plant on this industrial estate until its new plant is completed.)

Effect on business performance

Tsubaki envisions that the establishment of these two new subsidiaries will have an immaterial effect on its consolidated financial performance for the year ending March 31, 2013.