Announcement of Consolidation of Subsidiaries (Kanesho Co., Ltd.)

This is to annouce that our subsidiary Kanesho Co., Ltd. (hereinafter referred to as "Kanesho") reached a final merger agreement with Kato Teion Co., Ltd. (hereinafter referred to as "Kato Teion." It broke away from Kato Sangyo Co., Ltd. in April 2006, and, as was announced today by Kato Sangyo, will become a corporate division of Kato Sangyo on October 1, 2006 that will inherit the food service and chilled food business for the metropolitan and other areas.) effective as of October 1, 2006, and that the two companies concluded a merger agreement today.

1. Purpose of Merger

As was announced on November 18, 2005, Kanesho decided to merge with Kato Teion in order to enhance its intermediate distribution capabilities, leveraging its expertise in food services and chilled foods distribution, and expand its business by improving its customer services. Nippon Suisan began working this fiscal year on the "New TGL Plan," a medium-term (six-year) management plan. The merger is aimed at expanding the scale of Nippon Suisan Group's trade/wholesale business to enable more functions and services in line with the policy of the plan.

2. Purpose of Merger

(1)	Schedule
	Approval of Merger Agreement by Board of Directors	July 20, 2006
	Signing of Merger Agreement	July 20, 2006
	Approval of Merger Agreement at Extraordinary General Meetingof Shareholders
		August 7, 2006 (planned)
	Date of Merger (Effective Date)	October 1, 2006(planned)
	Date of Registration of Merger	October 2, 2006(planned)
(2)	Merger Method
	The merger will take place based on the spirit of equality, with Kato Teion being the surviving company and Kanesho being dissolved.
(3)	Merger Ratio
	Company Kato Teion Kanesho Merger Ratio 1 0.885 Note: 1.  Stock Allocation Ratio Stock shall be allocated based on 0.885 share of Kato Teion stock per share of Kanesho stock. 2.  Basis for Calculation of Merger Ratio Daiwa Institute of Research Limited (hereinafter referred to as "Daiwa") was requested to calculate the merger ratio as a third-party institution, and the parties involved decided on the aforementioned ratio subsequent to discussions based on the results of Daiwa's calculation. 3.  Result of Calculation by Third-Party Institution and Method/Basis of Calculation Daiwa analyzed both Kanesho and Kato Teion by employing methods of evaluating reduction in profit and current net properties. Daiwa then calculated the merger ratio by taking said analysis results into consideration. 4.  Odd Shares Should odd shares of less than one share result from the allocation of stock, a cash amount equivalent to the value of the odd share shall be given to the shareholder concerned. 5.  Number of New Shares to Be Issued As a Result of Merger 1,256,700 Shares of Common Stock

3. Overview of Merging Companies

	Surviving Company		Predecessor Company
(1) Name of Corporation	Kato Teion Co., Ltd.		Kanesho Incorporated
(2) Description of Business	Wholesale of frozen and chilled foods		Wholesale of frozen and chilled foods
(3) Date of Establishment	April 3, 2006		July 1, 1968
(4)  Location of Head Office	9-20 Matsubara-cho, Nishinomiya City, Hyogo Prefecture		5-43-1 Kita-itami, Itami City, Hyogo Prefecture
(5) Representative	Fumiaki Tatsugashira, President and Representative Director		Akira Someya, President and Representative Director
(6) Capital	450 million yen		710 million yen
(7)  Total Number of Shares Issued and Outstanding	700,000		1,420,000
(8) Net Assets	455 million yen		1,187 Million Yen
(9) Gross Assets	4,865 million yen		8,952 million yen
(10) End of Fiscal Year;	September 30		March 31
(11) Number of Employees	90		251
(12)  Major Business Contacts	Clients Domestic Supermarkets, Restaurants, Wholesalers of FoodProducts, and Others Suppliers Domestic Food Product Manufacturers and Others		Clients Domestic Supermarkets, Restaurants, Wholesalers of FoodProducts, and Others Suppliers Domestic Food Product Manufacturers and Others
(13)  Major Shareholders and Shareholding Ratio	Kato Sangyo Co., Ltd. 100%		Nippon Suisan Kaisha Ltd. 57.65% Kato Sangyo Co., Ltd. 33.80% Ajinomoto Frozen Foods Co., Inc. 4.23% Nichirei Foods Inc. 4.23%
(14) Main Financing Banks	Sumitomo Mitsui Banking Corp.		Sumitomo Mitsui Banking Corp. Mizuho Bank, Ltd.
(15)  Relationships of Companies Involved	Capital	Nippon Suisan owns 57.7% of Kanesho's total issued and outstanding shares.
	Personnel	A member of Nippon Suisan's Board of Directors also sits on Kanesho's Board.
	Business	Kanesho sells some Nippon Suisan's products and goods.

4. Business Performance over Last Three Fiscal Years (Unit: million yen)

	Kato Teion (Surviving Company)			Kanesho (Predecessor Company)
Fiscal Year	FY2003 ending September	FY2004 ending September	FY2005 ending September	FY2004 ending March	FY2005 ending March	FY2006 ending March
Sales	-	-	-	47,860	48,056	50,165
Operating Income	-	-	-	309	228	181
Ordinary Income	-	-	-	368	284	251
Net Income	-	-	-	123	139	Δ95
Net Income per Share (yen)	-	-	-	87.23	98.19	67.53
Dividend per Share (yen)	-	-	-	0.00	0.00	0.00
Book-Value per Share (yen)	-	-	-	657.82	770.17	836.05

5. Situation after Merger

(1)	Name of Corporation	K Chilled Foods Co., Ltd. (changed from Kato Teion)
(2)	Description of Business	Comprehensive wholesale distributor of food products
(3)	Location of Head Office	5-43 -1 Kita-itami, Itami City, Hyogo Prefecture
(4)	Representatives
	Representative Director	Akira Someya (Representative Director/President, Kanesho)
	Representative Director	Fumiaki Tatsugashira (Representative Director/President, Kato Teion)
		(Akira Someya and Fumiaki Tatsugashira are scheduled to assume the positions of President/Operating Officer and Senior Managing Director/Operating Officer, respectively.)
(5)	Board of Directors	Akira Yamashita (Managing Director, Kanesho) Kazuya Kato (President/Representative Director, Kato Sangyo Co., Ltd.) Osamu Inoue (Managing Director, Kato Sangyo Co., Ltd.)
(6)	Capital	1.2 billion yen
(7)	Gross Assets	20 billion yen (planned)
(8)	End of Fiscal Year	September 30
(9)	Major Shareholders and Shareholding Ratio
		Kato Sangyo Co., Ltd. 61.24% Nippon Suisan Kaisha Ltd. 33.74% Ajinomoto Frozen Foods Co., Inc. 2.47% Nichirei Foods Inc. 2.47%
	Note:  The figures reflect the shares to be allocated in connection with the partition announced today by Kato Sangyo Co., Ltd.
(10)	Effect on Business Performance Although the new company is scheduled to be an equity-method affiliate from October 2006, no change to the business is forecast at this time, since the effects on consolidated business performance for the current year have already been incorporated into the Outline of Financial Results announced on May 19, 2006 (decrease by 20 billion yen in consolidated sales from previous fiscal year; a minor effect on consolidated net income).