August-3-2005

JAE Constructs a New Plant in Yamagata Area to
Enhance Integrated Connector Production System

— Construction of a precision stamping plant, the largest in the Tohoku District —

In order to meet the above needs, we will aggressively increase capital now that we have achieved our balance sheet improvement for fiscal 2003 to a virtual non-debt status. With this capital increase, we our mid-term business prospect aim is to enhance our production capacity both at home and abroad, in terms of quantity and quality. Our policies for that objective include labor-cost-effective production using manufacturing tools and semi-automated assembling equipment in our overseas operation and production of highly-value-added products using specialized equipment in our domestic operation. As part of this effort, we are constructing our own 16,000 m² plant in China on a 56,000 m² site (in the City of Wuxi) that JAE Wuxi Co., Ltd acquired last year. Our plan is to commence operation in April 2006. In addition, JAE Philippines, Inc. is enhancing its production facility for automotive connectors.

Meanwhile in Japan, JAE Hirosaki, Ltd., the domestic production stronghold, is constructing a 3,400 m² stamping plant on its premises, which will commence operation in October this year. This is being done with the goal of enhancing the integrated production system.
The headquarters at Akishima has launched the construction project of a building for welfare and general affairs to be completed in April 2006, replacing the existing facility. Thus, we have been actively strengthening domestic and overseas efforts for production system enhancements and capital increases within the range of internal cash flow obtained during fiscal 2004.

At present, JAE Yamagata, Ltd. is operating another domestic stronghold for connector production within the Yokoneyama Industrial complex in the city of Shinjo. It has been 16 years since its commencement and the space is no longer adequate. To cope with this, we have acquired a new site of about 28,000 m² within this industrial complex and will construct a 10,000 m² plant, which will be the largest precision stamping plant in Tohoku when completed.

A detailed plan will be drawn up shortly. Our basic plan is to invest capital for the transfer of the existing stamping machines from the present plant and installation of additional high-speed stamping machines at the new location. As a mid-term project, we expect this to enhance our capacity up to 120 stamping machines. Concurrently, we will increase investment in the mold production system and enhance the molding and assembling capacities of the existing plants. These investments are part of our plan over the next three years to invest a total of about three billion yen, looking to rebuild an integrated connector production system.
Note that the new plant will be the largest precision stamping plant in Japan when we have completed the addition of 150 stamping machines.