November-06-2007

Construction of an EMI-shielded room and material analysis building at the Akishima plant

During the last three years JAE has been striving to strengthen its development and production capability, by constructing new factories and improving existing factories and related facilities at eight business operation sites in Japan and overseas.

JAE has a plan to partially retrofit the existing factory in Akishima that is the center of development and manufacture of the JAE group. JAE will do this in order to further reinforce operating bases and to achieve our objective "Supply ever higher quality products to customers, with higher competitiveness." This retrofit project will construct an "EMI (electromagnetic interference)-shielded room and material analysis building." This project also involves converting another existing facility to a new 5-story building with 12,000 sq. m total floor area. It will provide ample manufacturing space replacing the aging factory used for governmental demand in the aerospace area.

We would like to explain the specific targets for the construction of the EMI- shielded room and material analysis building. Recent trends toward higher speed digitalized communications have increased the importance of evaluation of EMI and EMI shielding performance of equipment in every operating area. In addition, there is a trend toward miniaturization, higher precision and function of products. Thus, it is vital to have more powerful capability for material analysis and evaluation to maintain and improve the quality of our products. In order to offer definitive solutions for these trends, we have begun this construction project.

Since the initial factory to operation was started to supply governmental demands in the area of defense and aerospace in 1970, it has been expanded from time to time in response to the expansion of business operations, but over time these facilities have aged.
This business area requires the most stringent quality management and supply for a long span of time, directly relating to the defense of our country. Through the planned reconstruction of the manufacturing space, we will fulfill our social responsibility.
With the two operation goals of (1) strengthening the consolidated business and expansion of overseas operations and (2) strong emphasis on free cash flow, we have been deploying our business efforts for these past eight years. As a significant result of these endeavors, we have improved our financial status, achieving debt-free operation since 2003. Building on this momentum, during these past several years we have remained committed to strengthening our domestic and overseas structures for development and manufacture, to enable further business expansion in the future.

Please take a look at our efforts.
Overseas operation: In China, JAE Wuxi constructed a new plant (operation started in March 2006), JAE Wujang a new plant (operation started in May 2004), and JAE Philippines obtained land in the vicinity of its site and increased the floor area of the facility by a factor of 1.8 (operation started in July 2007).
Domestic operation; JAE Hirosaki built a new stamping facility (operation started in October 2005), JAE Yamagata created a new precision stamping plant, the largest in Tohoku district, next to the existing factory (operation started in April 2006), and JAE Shinshu doubled the facility floor area (operation started in September 2006). The Akishima plant (in Tokyo), the general management base of these subsidiaries, built a welfare and administrative building (operation started in April 2006) and constructed a physical distribution center (operation planned to start in December 2007) of Nikko Logistics nearby. In addition, the Akishima plant has been actively investing in equipment to improve manufacturing infrastructure such as general-purpose stamping and molding machines.
The equipment investment totaled 43.2 billion yen for three years from 2004, setting a record every year.

JAE group is planning equipment investments exceeding 60.0 billion yen in the coming three years including the factory extension mentioned above.