August 23, 2004

Establishment of a New Company and Transfer of Production Functions

Nippon Suisan Kaisha, Ltd. (President & CEO Naoya Kakizoe) intends to establish a new company (Hachikan Co., Ltd.) in Hachinohe city in Aomori prefecture for the purpose of improving the efficiency and power of its domestic production capacity in January 2005.
Hachinohe Kanzume Co., Ltd. and NISSUI will be the main investors in the new company, which is planned to be handling production of frozen foods, canned foods, bottled foods, and processed marine products. Accordingly, the production functions for canning and bottling of the Shimuzu plant of NISSUI (Shizuoka-shi, Shizuoka) (*) and the production functions of frozen foods and marine products of Hachitei Co., Ltd. are transferred to the new company.

As already reported, the NISSUI Group will establish a new factory of Shandong Sanfod Nissui., Ltd. in China in March next year and position it as a cost competitiveness-oriented production base with an eye on overseas markets such as China and Europe as a group, while integrating the overall production functions of the overseas group companies. Within Japan as well, the Group aims for production of "products with high added values" and integration and improvement of our capabilities. According to this policy, this new company will act as one of the main domestic production factories handling frozen foods and room-temperature foods.

* The Shimizu plant will terminate the production in December 2004 and transfer the production to the new company (thus strengthening the production of bottled food products).