February 18, 2008

The management of Kanematsu Corporation announce that they have signed a contract to invest in Haldex Vehicle Products (Suzhou) Co., Ltd. (established in the Chinese city of Suzhou in Jiangsu Province by the Swedish company Haldex Garphyttan [itself a division company of the vehicle component manufacturer group Haldex AB]). The contract was signed in January 2008 between Kanematsu and Haldex AB,

In the field of steel wire used in engine valve springs, Haldex Garphyttan holds leading shares of about 80% in the European market, 40% of the U.S. market, and 35% of the total world market. The company now produces its products in Sweden, the United States, and China, where it set up Haldex Vehicle Products (Suzhou) within the Suzhou Industrial Park in 2006. The company's products are manufactured for engine valve spring makers operating in China - both local enterprises and European-owned companies.

Since its establishment in 2006, Haldex Vehicle Products (Suzhou) has been engaged throughout 2007 in equipping its factory with the necessary production facilities, and is ready to commence full-scale production from the start of 2008. Annual output at will initially be 2,500 metric tons, and this is scheduled to rise to 5,000 metric tons two years from now.

Kanematsu has since 1977 been engaged in supplying the main factory of Haldex Garphyttan in Sweden, as well as its U.S. factory, with steel alloy materials (manufactured by Kobe Steel, Ltd.) for processing into steel wire for engine valve springs. From now on, the Company hopes to export the products of Haldex Vehicle Products (Suzhou) to U.S.-owned and European-owned vehicle component makers located in the Middle East and the Indian subcontinent. An additional merit of the recently completed capital participation is that it strengthens ties between Kanematsu and the Haldex Group, opening up the way to possible future collaboration in the marketing of high-quality products other than steel wire.

Outline of companies in which Kanematsu has acquired an equity stake:

Direct investment target: Haldex Garphyttan (Hong Kong)
Address: 2003, Hutchison House, 10 Harcourt Road, Central, Hong Kong SAR
Paid-in capital: US$11,800,000 (approx. \1.3 billion)
Position of company in
overall arrangements:
Haldex Garphyttan (Hong Kong) is an SPC established to invest in the operational company Haldex Vehicle Products (Suzhou) Co., Ltd. in which it holds a 100% equity stake. Prior to Kanematsu's capital participation, Haldex Garphyttan (Hong Kong) was wholly owned by Haldex AB.
Equity stakes: Haldex, 97.1%
Kanematsu, 2.9%*

* This figure, in the amount of approximately \80 million, represents 7% of the total investment for steel wire production by Haldex Vehicle Products (Suzhou).

Indirect investment target: Haldex Vehicle products (Suzhou) Co., Ltd.
Address: No.6, Long Pu Road, Suzhou Industrial Park
Paid-in capital: US$11,800,000 (approx. \1.3 billion)
Position of company in overall arrangements: Actual business operations arm