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Tsubakimoto Chain A World Leader in Product Development

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Custome r-Orie nte d, Te chnology-Drive n Manufacturing

The Tsubakimo to Chain Gro up handle s a wide rang e o f pro duc ts, inc luding po we r transmissio n pro duc ts, suc h as ro lle r c hains and o the r c hains fo r g e ne ral industrial applic atio ns, timing c hain drive syste ms fo r auto mo b ile e ng ine s, re duc e rs, and mo tio n c o ntro l units as we ll as mate rials handling e quipme nt and syste ms. All o f the se pro d-uc ts are the re sult o f the dive rsific atio n and g ro wth that have ste mme d fro m the applic atio n o f the fundame ntal c hain te c hno lo g ie s that the Co mpany has ste adily c ultivate d sinc e it was fo unde d in 1917.

In ac c o rdanc e with o ur Gro upwide missio n o f “ pro viding be st value to c usto me rs aro und the wo rld b y c apitalizing o n o ur te c hnic al stre ng ths in po we r transmissio n pro duc ts and mate rials handling syste ms, ” we have an unwave ring c usto me r and te c hno lo g y o rie ntatio n. We b e lie ve that the o rig in o f o ur c o mpe titive , hig h- value - adde d pro duc ts is the ste ady e nhanc e me nt o f fundame ntal te c hno lo g ie s.

Si nce i t s foundi ng, Tsubaki mot o Chai n has beli eved t hat i t s t echni cal

ski lls and st eady manufact uri ng have been t he source of i t s growt h.

Thi s phi losophy, whi ch has been cont i nuously t ransmi t t ed t o all

employees, i s t he foundat i on of t he Company’s abi li t y t o supply hi

gh-value- added product s i n market s around t he world.

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TSUBAKI MOTO CHAI N ANNUAL REPORT 2 0 0 5

A Comple te De ve lopme n t Syste m

Focuse d on Custome r Satisf action

To maximize c usto me r satisfac tio n, Tsub akimo to Chain has built a c o mplete develo pment system that extends fro m fundamental tec hno lo g ies to devic e tec hno lo g ies, pro duc ts, and applied tec hno lo g ies.

The Co mpany’s R&D struc ture c o mprises the Develo pment and Tec hno lo g y Center and the R&D departments o f eac h o perating divisio n.

The Develo pment and Tec hno lo g y Center takes tho ro ug h steps to enhanc e the fundamental tec hno lo g ies shared by all o perating fields, suc h as materials, pro c essing , evaluatio n, and tri-bo lo g y tec hno lo g ies, and pro vides related info rmatio n to eac h o perating divisio n’s R&D depart-ment. Mo reo ver, it plays an impo rtant ro le in the develo pment o f tec hno lo g ies that are direc tly linked to new pro duc ts, suc h as new c o rro sio n surfac e pro c essing tec hno lo g ies, new antiabrasio n surfac e pro c essing tec hno lo g ies, new po wer transmissio n tec hno lo g ies fo r auto mo -biles, and alternate- adso rptio n, nano - thin- film pro duc tio n equipment. The c enter also handles

Tsubaki mot o Chai n

A WORLD LEADER I N PRODUCT DEVELOPMENT

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the de ve lo pme nt o f pro duc ts that transc e nd se g me ntal b o undarie s and lo ng - te rm pro duc t and te c hnic al de ve lo pme nt. The Auto Suppo rt De partme nt, whic h was e stablishe d in the ye ar unde r re vie w, c o nduc ts advanc e de ve lo pme nt in antic ipatio n o f the ne e ds o f auto make rs, the re by he lping the m to sho rte n de ve lo pme nt time s and re duc e c o sts. This de partme nt is a majo r po int o f diffe re ntiatio n with c o mpe tito rs.

The De ve lo p me nt and Te c hnic al Ce nt e r will d e e p e n it s c o o rd inat io n wit h o p e rat ing divisio ns in all three func tio nal areas o f a manufac turing c o mpany – sales, tec hno lo g y, and pro duc tio n – thereby assisting in the enhanc ement o f fundamental tec hno lo g ies and the pro vi-sio n o f o ptimal so lutio ns. The c enter is also in c harg e o f unified manag ement o f intellec tual pro perty ( IP) fo r the entire Gro up and will play an impo rtant ro le in the Gro up’s IP strateg y.

Eac h o p e rat in g d ivisio n ’s R&D d e p art me n t is c o n d uc t in g p ro d uc t d e ve lo p me n t an d impro ve me nt ac tivitie s base d o n the data de ve lo pe d in c o njunc tio n with the De ve lo pme nt and Te c hnic al Ce nte r. At the same time , marke ting staff me mb e rs with re spo nsib ility fo r de ve lo pme nt c ultivate c lo se re latio nships with c usto me rs and de ve lo p applie d te c hno lo g ie s fo r the purpo se o f o ptimizing c usto me rs’ syste ms.

Tsubakimo to Chain’s c o mpetitive pro duc ts are a result o f the c lo se c o o peratio n between the Develo pment and Tec hnic al Center and the o perating divisio ns’ R&D departments.

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High -Value -Adde d Products

Provide a Stron g Compe titive Edge

The Tsub akimo to Chain Gro up supplie s advanc e d pro duc ts that me e t c usto me r ne e ds b y tho ro ug hly pursuing quality in all are as, fro m fundame ntal te c hno lo g ie s to e valuatio n te c hno lo g ie s, pro duc tio n te c hno lo -g ies, and quality assuranc e.

St eel chai ns have only f i ve part s– o uter plates, inner plates, pins, bushes, and ro llers – but even a small erro r c an make a vital differenc e in perfo rmanc e. Ac c o rd in g ly, we are wo rkin g t o d if f e re n t iat e o urse lve s wit h h ig h q ualit y b y tho ro ug hly enhanc ing fundamental tec hno lo g ies, suc h as lifespan predic tio n tec h-no lo g ies. Ho wever, o ur superio rity in c hain o peratio ns is h-no t limited to the quality o f o ur pro duc ts. Ano ther majo r po int o f differentiatio n is the breadth o f o ur lineup o f pro duc ts that c an ac c urately reso lve the issues fac ed by c usto mers in a variety o f industrie s, inc luding info rmatio n te c hno lo g y, shipbuilding , ste e l, mac hine to o ls, and fo o d pro duc ts. A furthe r po int is o ur ab ility to supply advanc e d so lutio ns.

We beli eve t hat t he ori gi n of our compet i t i ve, hi gh- value- added product s

i s t he st eady enhancement of f undament al t echnologi es.

Supe r Ro lle r Chain

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10

TSUBAKI MOTO CHAI N ANNUAL REPORT 2 0 0 5 Fo r e xample , o ur mainstay Lambda® RS Ro lle r Chains, whic h no t o nly o ffe r lube fre e , lo ng -life o pe ratio n b ut also c an b e use d in te mpe rature s rang ing fro m - 1 0 ˚C to 1 5 0 ˚C, are an e xc e lle nt e xample o f ho w o ur hig h- value - adde d pro duc ts pro vide advanc e d so lutio ns to c us-to me r ne e ds. Furthe rmo re , we are re spo nding us-to g ro wing c o nc e rn abo ut e nviro nme ntal c o n-se rvatio n by e xpanding the re c yc ling o f un-se d plastic c hain.

I n aut omot ive part s operat ions, we are the wo rld leader in the simulatio n and evaluatio n tec hno lo g ies used to lo wer timing c hain no ise, to reduc e stretc h, to c ut fric tio n lo ss, and to e nhanc e te nsio ne r pe rfo rmanc e and durab ility. The pro duc ts that we de ve lo p o n the b ase o f these hig h tec hnic al c apabilities bo ast the advanc ed quality and func tio nality that meet the rig o ro us needs o f auto makers. Also , to respo nd to demands fo r advanc ed eng ine perfo rm-anc e, develo pment ac tivities that are c lo sely linked to , and so metimes ahead o f, auto makers are indispensable. Tsubakimo to Chain is wo rking to maximize c usto mer satisfac tio n thro ug h c lo se c o o rdinatio n, where eng ineers with advanc ed tec hnic al and pro blem- so lving c apabilities partic ipate in auto maker pro jec ts fro m the new eng ine develo pment stag e.

Timing chain drive syste m co mpo ne nts fo r V6 e ngine s A V6 e ngine that use s the Co mpany’s

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11

I n power t ransmission unit s and component s operat ions, where o ur pro duc ts inc lude re duc e rs and variable spe e d drive s, mo tio n c o ntro l units, c o upling s, and c lutc hes, several pro duc ts have g arnered to p shares o f the do mestic market, and we have built a so lid po sitio n. Tsubaki Emerso n, with a fundamental develo pment po lic y o f enhanc ing c o re pro duc ts and c o re tec hno lo g ies, is wo rking to c reate new markets by develo ping hig h- value- added pro duc ts. Enviro nmentally friendly Po wer Cylinders, whic h are used in IT- related equipment, are a g o o d example o f tho se effo rts. In the future, by ag g ressively develo ping new pro duc ts, we will wo rk to raise the c o ntribu-tio n made to o ur perfo rmanc e by new pro duc ts.

I n mat eri al s handl i ng syst ems operat i ons, we are c o nc e ntrating o ur d e ve lo p me nt reso urc es o n o ur c o re targ et fields – the distributio n, newspaper, auto mo tive, bio tec hno lo g y, IT, and fo o d industries – and, with o ur advanc ed pro duc t func tio nality, we have established distinc tive po sitio ns in these markets. A g o o d example is o ur industry- leading linear mo to r hig h- speed so rting systems fo r the distributio n industry, whic h pro vide a wide- rang ing , ac c u-rate re spo nse to c usto me rs’ spe c ific ne e ds, suc h as the so rting o f sundrie s, fo o d pro duc ts, apparel, and parc els. We also have a hig h market share in auto mo tive bo dy paint sho p c o nveyo r systems, and in the year under review we bo lstered o ur lineup o f these systems with the release o f the Mino miCo nveyo r System, whic h helps auto makers to impro ve the wo rkplac e enviro nment and inc rease pro duc tivity. Our wo rk in the auto mo tive industry also invo lves applying the tec h-no lo g ies that we have c ultivated in o ur c o re fields to develo pment effo rts in related fields, suc h as systems fo r auto mo tive assembly pro c esses.

I n t hese ways, Tsubaki mot o Chai n has est abli shed t echni cal superi ori t y i n a range of product f i elds. Thi s compet i t i ve edge has been caref ully cult i vat ed over many years i n a corporat e cult ure t hat emphasi zes t he st eady enhancement and accumul at i on of t echnology.

To maxi mi ze cust omer sat i sfact i on, Tsubaki mot o Chai n has bui lt a complet e

development syst em t hat ext ends f rom f undament al t echnologi es t o devi ce

t echnologi es, product s, and appli ed t echnologi es.

Sho ck Mo nito rs

Machine to o l e quipme nt that use s Tsubaki Eme rso n’s Sho ck Mo nito rs

Re turne d bo o k so rte r

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