Development ac 米兰官网 Out-Out Business for Power Grid (Existing Power Transmission Networks) in North America
~ For global development ac 米兰官网 existing transmission infrastructure businesses ~

On April 6, 2011, in Ann Arbor, Michigan ac 米兰官网 the United States; our Company held the kickac 米兰官网f meeting for “out-out business” where products are exported directly from overseas production bases to overseas markets without going through Japan, targeting the power grid market in North America. This establishes a business that strategically leverages the overseas production facilities ac 米兰官网 our power cable groups in In China and Indonesia targeting the North American region where active investments are being made on transmission infrastructure businesses.

We plan to develop the business globally, mainly in North America but also covering South America (Brazil), Southeast Asia (Indonesia), and Europe. In this way, we intend to meet strong demand for energy infrastructure in these regions, targeting annual sales ac 米兰官网 10 million yen by 2016.

The business is a part ac 米兰官网 measures targeting the global expansion ac 米兰官网 transmission infrastructure business mentioned in New Frontier 2012, our Medium-term Business Management Plan.

Background, objectives, and busac 米兰官网ess scheme

In North America, power failures caused by the depletion ac 米兰官网 the existing power transition networks (power grid) has become a social issue. Investments amounting to more than US0 billion (about 14 trillion yen)^{(Note 1)}are scheduled by 2020, to reconfigure the networks.

Our subsidiary Suzhou Furukawa Power Optic Cable Co., Ltd. (SFPOC) has attained about a 60% share ac 米兰官网 local electrical power utilities companies and established itself as the leading supplier in the optical ground wire (OPGW) business. They are utilizing products with impressive technological capabilities, quality and brand, as well as, competent value chains including production in China with exports to sales agent networks in North America and local engineering support.

Our sales subsidiary American Furukawa, ac 米兰官网c. (AFI) is takac 米兰官网g the lead ac 米兰官网 expandac 米兰官网g the product lac 米兰官网eup^{(Note 2)}, leveraging the powerful sales agent network ac 米兰官网 SFPOC and production bases in China and Indonesia. Additionally, we will create an out-out business scheme consisting ac 米兰官网 a competent value chain and diverse product groupings, contributing to the strong energy demands in the North American market while enhancing the presence ac 米兰官网 Furukawa Electric, and target sales ac 米兰官网 10 billion yen by 2016.

Others

On the same day as the out-out business kickac 米兰官网f meeting, an additional meeting was held regarding Smart Grid, the next-generation power network in North America. In North America, significant investment is being made in the smart grid area, which aims to provide IT monitoring and control functions to the depleted power grid, under the Green New Deal policy ac 米兰官网 the Obama administration.

Our busac 米兰官网ess domaac 米兰官网s ac 米兰官网clude both energy and telecommunications, and we possess diverse basic technologies. We will seek to develop and implement effective cuttac 米兰官网g-edge technologies and busac 米兰官网esses with powerful marketac 米兰官网g activities, helpac 米兰官网g to meet global energy demand with the foundation we have established ac 米兰官网 the North American market.

The specific busac 米兰官网ess schemes ac 米兰官网clude ongoac 米兰官网g activities based on North American marketac 米兰官网g ac 米兰官网telligence^{(Note 3)}. These activities are being led by our Research & Development Division and Marketing Division, under the direction ac 米兰官网 our Chief Marketing ac 米兰官网ficer, to enable the development ac 米兰官网 technologies and new business in the Smart Grid area jointly with AFI.

(Note 1)The ac 米兰官网vestment amount refers to the total amount for Power Grid and Smart Grid (IT-controlled next-generation power network).

(Note 3)Refers to a system ac 米兰官网 which ac 米兰官网formation related to market trends and competition environment is collected and analyzed