Mid-term Business Strategy

• Transfer of production from the U.K. to continental Europe
• Withdrawal from unprofitable businesses leaving only our Core Businesses

	Share	Market size	Measures
Miniature& Small-sized			Transfer of all production to the Jakarta Plant
Standard			Concentrate production at the Iskra Plant
Aero			Phased sale to SKF
Precision			Reinforce the Newark Plant
Automotive			Concentrate and reinforce production at the Peterlee Plant
Others			Supply from Japan or other locations, or withdraw from businesses

• Streamlining businesses through the closure of factories and sale of business units
• Withdrawal from unprofitable businesses
• Focus on core businesses and reinforcement of profitability
• Reduction of sales, general and administrating costs
• Downsizing the labor force
• Increase procurement from continental Europe

 In accordance to our strategy to transfer our production sites from the U.K. to continental Europe, we are moving production of our standard ball bearings, which are commodity products, from the Peterlee plant to the Iskra plant in Poland.
The Peterlee Plant will increase procurement from continental Europe, and specialize in the production of cost competitive automotive bearings.
 Meanwhile, the products manufactured at the former RHP plants, excluding precision bearings which will continue to be produced at the Newark plant, will be changed to imports from Japan or, if unprofitable, we will withdraw from the business altogether.
 We will also close the former European headquarters at Ruddington and downsize the administrative and technical divisions.
 Furthermore, at the Iskra plant in Poland, we have already separated the non-core business such as the spark plugs, etc. and will continue to reduce the workforce, including the surplus operators in the bearings business in order to reinforce competitiveness.