February 1, 2007
Full participation in the market for construction equipment in India

Kobelco Construction Machinery Co., Ltd. (head office: Shinagawa-ku, Tokyo; Hiroo Shimada, President & CEO, hereinafter referred to as "KOBELCO") and ITOCHU Corporation (hereinafter referred to as "ITOCHU") recently established Kobelco Construction Equipment India Pvt. Ltd. for participation in the rapidly growing Indian construction equipment market. The new company, located on the outskirts of Delhi in northern India, is a joint venture for sales of and provision of services for construction equipment, and commenced operations in January 2007.

Outline of Kobelco Construction Equipment India

Name : Kobelco Construction Equipment India Pvt. Ltd.
Location : on the outskirts of Delhi (about 20 km east from central Delhi), India
Capital : JPY390, 000,000 (INR150, 000,000)
Shareholders : ITOCHU Group-70%, KOBELCO Group -30%
Established : November 2006
Representative : Masayuki Yamamoto (also serving as Chairman of ITOCHU India Pvt. Ltd.)
Business : construction equipment sales and services
Board of directors : 3 directors from ITOCHU, 2 directors from KOBELCO
Number of employees : about 30 (as of March 31, 2007)

Supported by a burgeoning demand driven by fast-paced infrastructural investment for improvement of roads, airports, seaports, and the power sector, the market for construction equipment in India is experiencing steady growth. The demand is projected to expand even further over the coming years.

To address the booming demand for Hydraulic Excavator in India, KOBELCO and ITOCHU reached an agreement on joint development of business in construction equipment sales and services there, and consequently set up Kobelco Construction Equipment India Pvt. Ltd.

KOBELCO and ITOCHU decided to site the head office on the outskirts of Delhi, the political center of India in the northern part of the country, and a branch in Chennai, in the swiftly growing southern part. Our plan is to use these two core locations as the basis for our efforts to promptly build a network of dealers and bolster our foundation for sales and services in India.

Against the background of soaring crude oil prices in recent years, there are mounting needs in India for construction equipment featuring high fuel efficiency and excellent operability. Through the new joint venture, we are going to import the latest Hydraulic Excavator models made by KOBELCO and sell them in India under the KOBELCO brand. These excavators deliver high levels of fuel efficiency and operability while also meeting Japanese regulations on emission levels (under "Act on Regulations of Non-road Special Motor Vehicle Exhausts").

Through the aforementioned joint venture, we intend to heighten our presence in India for a further buildup of our business there, by means possibly including the startup of production in India, while carefully monitoring the trend of the demand.