* FY2011(Plan) announced at the FY2010 financial results briefing held on April 27, 2011.
For the FY2011 revised plan, please see the presentation materials.

The Urban Infrastructure & Environmental Products (UIEP) Company is the leading supplier of resin pipe products in Japan. The UIEP Company, with its 50 years of accumulated know-how, has targeted the following products to be a driving force in future overseas growth: pipeline renewal products; glass reinforced plastic pipes; various piping products including industrial piping materials, such as valves; and performance materials, such as sheet material for aircraft and fiber-reinforced foamed urethane for railway applications. The UIEP Company aims to achieve a steady expansion in profits by creating an effective product mix of resin pipes and other products, which are the core profit earners for its domestic core businesses, and products from promising growth segments. Management has also been restructuring the domestic core businesses in response to the protracted stagnant demand in the domestic construction market, which has remained sluggish since fiscal year 2007.

The UIEP Company increased sales in the domestic core businesses in fiscal year 2010 by harnessing the recovery in detached housing demand to maintain sales volume amid downward pressure on product prices from intensifying competition. Growing demand for products in the social infrastructure stock and energy-saving fields, as well as other fields with growth potential also contributed to the domestic sales result. Overseas, the company's water infrastructure business struggled, but the sheet business rebounded sharply and the pipeline renewal business posted sales growth. As a result, the UIEP Company's overall net sales grew by 900 millions of yen year on year to 195.6 billions of yen for the fiscal year.

Operating income for domestic operations improved by 2.7 billions of yen from the previous fiscal year. The increase was the sum result of positive contributions that included growth in sales volume accompanying a recovery in demand (0.5 billions of yen), progress with cost-cutting efforts (1.6 billions of yen), and lower fixed costs achieved through staff reductions (2.2 billions of yen), which more than offset such negative factors as lower product prices amid intensifying competition (1.5 billions of yen) and higher raw material costs (0.2 billions of yen). Operating income overseas rose by 1.2 billions of yen with increased sales volume (1.2 billions of yen) and reduced fixed costs (0.1 billions of yen) being the main contributing factors. Accordingly, the UIEP Company's efforts in fiscal year 2010 to reduce fixed costs and other costs, combined with the business recovery overseas, enabled the company to record operating income of 1.5 billions of yen and achieve a positive income result for the first time in two years.

In fiscal year 2010, the company succeeded in establishing a profitable operating structure as a result of efforts to lower fixed costs and other costs, and simultaneously clarified three new issues that must be addressed: 1) the limited ability to realize significant profit from single-item sales, 2) the need to revise marketing strategies to accelerate an expansion in sales of growth products, and 3) the need to reorganize the overseas water infrastructure business.

Management believes that to resolve these issues, the business model must be reformulated, namely through the adoption of new approaches and movement away from the previous methods that focused on expanding business by increasing the sale of single products through the expansion of target fields and sales regions. On the business operations level, we plan to introduce changes in the business activities of the value chain, addressing both upstream and downstream activities. On the product level, we will move away from single-item product sales and seek to expand "package" orders for multiple products sold as a package, including sales of product sets, auxiliary product sales, and system sales. We plan to begin implementing specific initiatives to realize this new business model early in fiscal year 2011.

The UIEP Company plans to increase sales by concentrating management resources on expanding the domestic and overseas Frontier 7 businesses. Particular focus will be placed on growth products, centered on construction stock and energy-saving products, with the aim of boosting sales of growth products from 37.5 billions of yen in fiscal year 2010 to 46.5 billions of yen in fiscal year 2011. We also plan to increase sales by expanding the overseas operations for the pipeline renewal, sheet, water infrastructure, and industrial piping materials businesses. We are aiming for these initiatives to increase UIEP Company overall net sales by 10.4 billions of yen year on year to 206.0 billions of yen in fiscal year 2011.

We will also work to reinforce the earnings base by continuing to cut fixed costs and other costs, particularly in the domestic core businesses, and by further lowering the break-even point. We lowered the sales to break-even point ratio from 103% in fiscal year 2009 to 97% in 2010, and are aiming to trim another five percentage points to bring it down to 92% in fiscal year 2011. We believe that is the level necessary to maintain an earnings base with the resilience to remain viable when domestic new housing starts reach the anticipated level of 700,000 starts per year.

We are also aiming to continue the growth achieved in the previous fiscal year and attain 5.0 billions of yen in operating income in fiscal year 2011. We plan to achieve this target by expanding the sales volume to increase marginal profit, and by maintaining or raising sales prices amid the improving demand conditions.

As a company that develops water supply and sewerage and other infrastructure that is so closely integrated into people's daily lives, our foremost priority in fiscal year 2011 will be contributing to the post-earthquake reconstruction.

To contribute to post-earthquake reconstruction, we are utilizing our bases in western Japan and overseas to reinforce our supply system for PVC pipes and other essentials for eastern Japan. We are also focusing on reestablishing the water supply and sewerage infrastructure for reconstruction, and are working to quickly establish a comprehensive response system across the complete value chain, encompassing everything from surveying and diagnostics to product sales and construction, to meet the needs of that region. We are taking a proactive stance as a company, so as to play a leading role in the reconstruction of the infrastructure in the stricken areas and the fortification of the domestic infrastructure in Japan.

In addition, in fiscal year 2011 we aim to aggressively implement an offensive approach to business expansion, to substantially improve our sales and income, and are moving beyond our previous approach of fortifying the earnings base in response to declining demand. This new approach will entail: 1) revising the business model and broadening our business domain to expand sales, 2) solidifying the earnings base, and 3) actively expanding overseas businesses.

We plan to expand sales by revising the business model and broadening our business domain by eliminating our dependence on sales of single product items and by adopting a business model that will enable us to leverage our comprehensive business strengths and which places a priority on system sales and "package" orders. We will develop our overall strength by maximizing the utilization of the company's resources and aggressively establishing partnerships to fortify areas of weakness.

We intend to realize the solidification of our earnings base by reducing fixed costs, mainly in our core domestic businesses, to further lower the break-even point.

In our overseas business operations, we plan to use the demand recovery trend as a catalyst for accelerating the growth of our sheet, industrial piping materials, and pipeline renewal businesses. We also will continue advancing efforts to rebuild the overseas water infrastructure business. In China, we will seek to increase orders received from the inland regions, while also accelerating business expansion in the coastal regions.