Dear Vauled Customers

This is to announce the reorganization of our domestic production facilities as part of our three-year, mid-term management plan that we are currently working on.

　In promoting the globalization of our business, our goal is to be able to manufacture products of the same high quality anywhere in the world, under a principle we call "Copy Exactly" - or CE! At heart, however, we believe that the quality control of products is at one with the development of human quality. Hence, we are making every effort to foster and enhance our human resources such that our employees can actively participate in international business on a global basis, while, at the same time, establishing a global human resources system or structure.
　Thanks to the efforts we have made so far, we have been recognized by the Ministry of Economy, Trade and Industry and have received the "Award for Excellence" in recognition of our achievements in the overseas development sector of the MONOZUKURI Japan Grand Prize. While changes underway in the Japanese economy(also known as "Abenomics") have been taking root and creating a sense of expectation for domestic economic recovery, they have so far had a more limited beneficial effect on the business community, and the enviroment for companies in Japan is still harsh and tough.
　Nevertheless, as the tangible effects of "Abenomics" do begin to extend to the manufacturing economy, we are taking advantage of the changes to refine our competitive edge and develop a more agile and efficient management. And so, with the honor of having received the "Award for Excellence", we have decided to reorganize our domestic production facilities as part of our effort toward building a truly global business enterprise.

　We are currently moving forward with our "Selection and Concentration" plan by carefully evaluating the items we currently produce domestically and by choosing to transfer production of some of them to our overseas subsidiary companies. This plan will further enhance our operating foundations. Specifically, with spring of 2014 as a target, we will transfer production of some items currently produced at the Osaka Kashiwara and Tsukuba Research Plants to our subsidiary company in Vietnam.
　Furthermore, by summer of 2015 we will have carried out a reorganization of the current domestic production system based on three plants(i.e. Osaka Plant, Osaka Kashiwara Plant and Tsukuba Research Plant) to a two-plant system, integrating the operations of the Osaka Kashiwara Plant and Tsukuba Research Plant in order to further improve operational efficiency. Our subsidiary company in Vietnam, which started operations in 2006, is now our most sophisticated plant in terms of both hardware and software. Featuring a sophisticated infrastructure required for the production of precision valves and equipment, it produces products of the same high quality as those produced in our domestic plants in Japan.

Thank you very much.