Establishment of a new Carbide Tool Distribution Centre in Narita, Chiba prefecture.

April 26, 2006

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  The Advanced Materials & Tools Company (President: Fumio Shimada) of Mitsubishi Materials Corporation (Capital: 101.7 billion yen, President: Akihiko Ide) will establish a new Distribution Centre in Narita, Chiba prefecture with an aim to expand and strengthen the global supply system of the company's carbide tools. The new centre will be open from May 8th 2006.

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  For the cemented carbide business, there are inventory centres in major markets such as Japan, United States, Germany, Singapore and Brazil where vast quantities of tools are stocked. This makes it possible to have a system whereby standard ISO products can be delivered immediately after an order is accepted from the customer.
  The overseas carbide tools business in Europe and Asia has been performing well in recent years and accordingly, with the diversification of customer demand and the expansion of the product range, inventoried items continue to increase significantly.
  Such circumstances have dictated a renovation of the old stock system where products were stocked at every local production facility and the forming of a new distribution centre near Narita airport was undertaken in order to take maximum advantage of the convenience of the air freight.   The establishment of the new centre will strengthen our distribution system for China, Korea, Taiwan, Southeast Asia and South America. China has also experienced a remarkable development in the automobile industry as well as becoming a key customer of carbide tools.
  The new warehouse operations at the Narita distribution centre will be entrusted to Hitachi Transport Systems, Ltd. We will merge our accumulated special inventory management system with Hitachi Transport System's distribution management know-how into a highly flexible distribution system whereby we can quickly and properly respond to changing market needs.
  This merge will realize pinpoint inventory management and bring a reduction of distribution lead times with further increases in the overseas shipment frequency. Furthermore, we will make an effort to continue to improve our service to customers and expand sales opportunities.
In addition to the establishment of a new distribution centre, an independent department in charge of distribution strategy aiming to strengthen our global inventory and distribution management system has been created.
  Distribution strategy will be top priority for the carbide tool business and continued optimisation of the system not only in Japan but on a global scale will proceed.