HITACHI CONSTRUCTION MACHINERY

Hitachi Construction Machinery Co., Ltd. (HCM) announced September 1, 2006 that the company has decided to construct a new plant for hydraulic components as detailed below.

HCM expanded production capacity for hydraulic components at the Kasumigaura Works in order to meet demand at bases around the world. However, since HCM cannot currently keep up with the rapid rise in demand, management decided to begin construction of a new components plant in line with an urgent need for one and given the fact that sales have been capped at existing supply levels.

Planned construction site

Hitachinaka Industrial Site: 218,000m2
Location: Shinkou machi, Hitachinaka city, Ibaraki, Japan
Breakdown of Hitachinaka Industrial Site

• Hitachi, Ltd. property: 148,000m2

• Ibaraki Prefectural property : 70,000m2

Plans call for entering into lease agreements with Hitachi, Ltd. and Ibaraki Prefecture, respectively, with the option to purchase the properties mentioned above in the future. Timelines, leasing fees and other details of the lease agreements will be announced at a later time.

Plant area: 24,000m2

Product lineup

• Hydraulic components for 7-800 metric ton class excavators

• Components for wheel loaders

• Components for mining dump trucks, mini-excavators and other products, as well as all HCM Group products

Annual production capacity for Phase 1

• Hydraulic excavator components: 48,000 units/year -Total number of units-

• Wheel loader and wheel excavator components: 6,500 units/year

Number of employees

• Approx. 100 (as of August 2007)

• Building and infrastructure Approx. 4 billion yen

• Production facility Approx.10 billion yen

Total Approx. 14 billion yen

• Hydraulic excavator components :54,000 units/year -Total number of units-

• Wheel loader and wheel excavator components:13,000 units/year

• December 2006 Conclusion of lease agreement

• January 2007 Start of construction

• August 2007 Start of production

For more information: please visit www.hitachi-c-m.com.