Hitachi Construction Machinery

Komatsu Ltd. and Hitachi Construction Machinery Co., Ltd. have agreed to start discussions concerning a cooperative relationship in production and procurement that is intended to further enhance the cost competitiveness of their products. More specifically, the Parties will study a wide range of business arrangements to reduce production costs mainly by cross-supply and joint procurement of components for construction and mining equipment.

The two companies will focus on the subject areas specified below. As they continue their discussions, they plan to agree on collaborative relations beneficial to both Parties, and to implement them in a timely manner in thesecond half of this fiscal year.

1. Collaboration in production and procurement of components

1. Cross supply of components which each Party produces at its own plants.
2. Joint procurement of third party components.

2. Collaboration overseas

1. Mutual referencing of their suppliers, joint search for suppliers and procurement.
2. Cross supply of parts and components between their respective overseas manufacturing subsidiaries.

3. Complementary relationship in attachments and new areas

1. Cross supply and joint development of attachments.
2. OEM supply of niche or specific-application products.

The agreement covers production and procurement only and excludes the areasof sales and services.
Accordingly, it will not affect the sales networks, brands or product identities of the Parties. The two companies have no plans for mutual capital participations.