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Panel discussion:"The Future Business Model for the Global Industrial Container

Industry"Masaki Okada, Nisshin Yoki Co., Ltd.

Good afternoon, everyone.When the 15th International Conference on Industrial Packaging is held here in

Vancouver, I myself am very pleased being able to attend.It was Mr. Nakamura who speaks originally, but his physical condition did not

allow him to attend. Therefore, I, Mr. Okada will speak in place of him.

Our Company (Nisshin Yoki Co., Ltd.) has started up the reconditioning business of steel drum by making a joint investment with four Japanese steel drum reconditioners in Tianjin, China in 2007. Furthermore, in Qingdao (Shangdong, China), we have a joint venture dealing with the reconditioning machineries for drums. The inquiries and references have been increasing in both bases utilized the Japanese technologies from each place of China.

From now on, we will expand the base of Container Reconditioning business in China. To start with, we entered the activity to start the steel drum reconditioning business in the Huadong area (East China) within the year 2015.

The factory is to be constructed in Taicang (Jiangsu) where the joint partner is. In this plan, we have set up the ability of 25,000 reconditioned drums monthly. Currently, the screening of environmental assessment documents is proceeding with the formalities. We are thinking to establish the reconditioning facilities for closed head drum to start with.

While the Chinese government focuses power on environmental measures, even a local government level shows a stronger control/guidance to the distribution and the drum reconditioner of the used drum in recent years. Consequently, there is a trend that the used drum being concentrated upon a powerful reconditioner.

We are thinking that the reconditioning volume is related to the increase, because the number of collection is increasing at our joint partner and the reconditioning business is expanded under joint management with us.

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We are estimating that the demand of drum in Huadong areas, where the petrochemical industry is integrated centering Shanghai, is as much as the total volume of Japanese distribution although there is no definite statistics. While the new steel drums have been supplied by the foreign-owned and a part of Chinese manufacturers, as for the reconditioned drums, the development of the whole industry is not improved and the image of the user side to the reconditioned drums is not favorable, the use of reconditioned drums is remaining extremely limited.

The reconditioned drums in Japan have been used widely in fields such as the lubricant, chemistry, paint, the food. In the Huadong area, many of the foreign-owned companies including the Japanese-affiliated companies made inroads into these fields. From our market research until now, we think the potential demand of reconditioned drums in Huadong area is very high.

In the products of various fields, we think that the demand to the Asian countries including Japan in particular was cheap and high-quality products only.

The substances which may destroy a global environment are contained at the time of discharge depending on the waste treatment and disposal methods such as the spin-off and by-product generated at the stage of production, by repeating these production and consumption.

Though the discharge companies understand the situation, they are considering that to take measures to the global environment influence is to spoil the profit.

Even though there are problems for the preparation/penalty of related laws in the various countries, we think that there is the situation of today in the way of thinking that "Turn a blind eye to something unpleasant” as we say in Japanese.

From now on, we install environmental measures facilities in line with the effluent standard of each country as well as observing the Japanese environmental regulation, and perform the reconditioning of steel drums and the reconditioning business of industrial containers which the country and the area require. And we, as the future business model, want to promote the business expansion not only preserving the global environment but also taking upon ourselves the demands of global environment improvement concurrently.

Thank you for your kind attention.5/13/2015 2

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