Electric Co., Ltd. in Jingjiang City, Jiangsu Province with attendance of Mr. Mitsuhiro Oishi, President of Fujitsu General Limited, Mr. Zhu DeKun, Chairman of Little Swan Group and government executive members of Jiangsu Province, Taizhou City and Jingjiang City as well as executives of Chinese Electric Household Appliance Association, and the tape cutting ceremony and factory tour followed the speech by Mr. Hisao Igarashi, Chairman of F.G.L.S. Electric Co., Ltd. and other attendants.

Thereafter, the press interview was held with 40 press companies and 6TV stations at Jingjiang International Hotel in which Mr. Xu Yuan, Vice President of Little Swan Group, explained "present situation and future plan of F.G.L.S. Electric Co., Ltd." and the background of talks between Fujitsu General and Little Swan Group on the establishment of the joint venture and the results of the efforts and cooperation of both companies to start the full-scale operation within the short period of time as well as the current operations and future development plan. Then, Mr. Oishi, President of Fujitsu General and Mr. Xu, Chairman of Little Swan Group made speech on the strengthening of mutual cooperation for the future development.

Our company signed the joint venture agreement with "Little Swan Group", a leading electric household appliance manufacturer, with respect to the establishment of a new company of motor business on October 24, 2003 with aim to further strengthen our air conditioner business and enhance the competitive power in the global market by strengthening the motor business which is a key device of air conditioner. Thereafter, a new company, "F.G.L.S. Electric Co., Ltd.", was established on December 12. (as already announced)

In the first stage, the factory building was completed and production facility was installed in April, 2004. In May, the adjustment of the facility was made making test production and the production started in June to supply for Shanghai air conditioner factory.

In the second stage, the factory started the full-scale production in November and is now producing the latest type of energy-saving DC motors and direct winding AC motors at the pace of 10,000 units per day (3 million units per year).

The quality level is very stable with 99.5% non-defective rate in assembly line and less than 30PPM defective rate after delivery, and by realizing this high level of production, the full operation setup is completed both in quality and volume at the motor factory in China.

Before the establishment of the motor factory in China, we established a factory of motors for middle and large size air conditioners in Thailand in 1999, which has been supplying all motors for our air conditioner factory in Thailand. With the start of operation of the motor factory in China this time, the production and supply setup of key device in the most suitable place was established for our main air conditioner factories in Thailand and Shanghai, which is expected to enable to cope with the rapidly changing market and the demand for cost competitiveness.

We will develop and expand the business by further strengthening the cooperation with Little Swan Group with aim to supply to our Shanghai factory of air conditioners and strengthen the external sales within China as well as through the sales channel of Little Swan Group and Fujitsu General in other territories. The new company intends to further strengthen the air conditioner business and expand the motor business in Fujitsu General and aims to develop and expand the motor business in Little Swan Group.

Our future plan is to sell 3 million units (about 3.7 billion yen) in 2005, 7 million units (about 8.8 billion yen) in 2007 and 10 million units (about 12.6 billion yen) in 2010.

1. Company name:

F.G.L.S. Electric Co., Ltd.

2. Establishment:

December 12, 2003

3. Representatives:

Chairman:

Hisao Igarashi (Fujitsu General)

Directors:

3 from Fujitsu General
2 from Little Swan Group

4. Investment ratio:

Fujitsu General 50%, Little Swan Group 50%

5. Location of head office:

No.8, JiangZhou Road, Economic Development Zone, Jingjiang City, Jiangsu Province, P.R. China

6. Line of business:

Production and sales of motors for air conditioner and electric household appliances for worldwide market.

7. Settlement term:

December 31

8. Capital:

US$6.3 million (approx. 730 million yen at conversion rate of $ = 116 yen)

9. Scale of factory:

1. Factory land area: about 50,000 square meter
2. Building area: about 25,000 square meter
3. Production scale:
   

   10,000 units per day
   3 million units per year