News Room 2008 (The former Furukawa-Sky)

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Increased Production Capacity Planned for Automotive Aluminum Precision Casting Parts Subsidiary in Vietnam

July 31, 2008

Furukawa-Sky's subsidiary company incorporated in Vietnam (Furukawa-Sky Aluminum (Vietnam) Inc.; Headquarters: Ho Chi Minh City; President: Masahiro Iwata) has decided to increase its production capacity of automotive aluminum precision casting parts by adding casting machines and ancillary facilities. Operations are scheduled to commence in March 2009 at a total projected investment of about US$2 million.

The attach rate of turbocharged engines to automobiles is growing alongside global awareness of the importance of fuel efficiency driven by concern for protecting the environment and soaring oil prices. Turbochargers have primarily been attached to diesel engines, but have recently been added to gasoline engines as well to enhance fuel efficiency.

Usage is especially widespread in Europe, where 50% of passenger vehicles are powered by diesel engines, most of which are equipped with turbochargers. The number of diesel-powered vehicles is expected to increase in North America and Asia.

With the projected accelerating demand for turbochargers, demand for aluminum precision casting parts, production of which has so far increased 5%-7% each year, is estimated to reach approximately 25 million units worldwide in 2008.

The production volume of Furukawa-Sky's automotive aluminum precision casting parts, including parts produced in Japan, has steadily increased since first started in 2002. In fiscal 2008 we produced 7.6 million parts, or 4.6 times as many as in fiscal 2003, and we expect to have the top market share at about 33%. In fiscal 2009 we plan to produce 10 million parts, or about 30% more than the previous fiscal year.

Looking ahead to fiscal 2010 and after, we will continue to meet growing demand from our customers and build a stronger standing in the field. We anticipate further demand in fiscal 2011 and beyond, and plan to expand our facilities for boosting production accordingly.