New Division Company System

Feb. 7, 2000

Nissho Iwai is reforming its organization, centered on its Division Company System, to accelerate business implementation.

The primary aim of the Division Company System, which forms the basis for organizational reform, is to accelerate decision making and raise the level of self-responsibility by establishing optimal organizational structures, personnel systems and operating guidelines in each business area. The ultimate goal is to boost consolidated return on assets and return on equity, and to increase shareholder value.

Implementation of the organizational reform program began on April 1, 2000. Based on the new system, we will continue efforts begun two years ago to strengthen our earnings structure through the concentration of resources in strategic business areas.

Outline of Organizational Reform

Company System

The current organization of four operational groups and 19 divisions will be replaced with a new Division Company System of nine companies. The Information Business Division will be transferred to an independent subsidiary, ITX Corporation.
See "Establishment of ITX Corporation"(February 8, 2000)

・Each company will be directly led by a company president and organized into its own divisions (the current divisional system will be abolished) to form a dynamic self-reliant organization. In addition, a Planning & Administration Office will be established at each company.

・As a result of these changes, the current system of four operational groups, 19 divisions, 79 departments and 173 sections will become nine companies with 70 divisions and 156 sections.

Corporate Administration

・In Corporate Administration, the group/division system will also be abolished and replaced by a more horizontal organizational system.

・The new Corporate Administration will be divided into two areas: 1) Corporate Staff Functions, which will handle corporate group planning, management and central control; and 2) Service Providing Functions, which will provide services to the new companies and Nissho Iwai Group companies. The latter area will promote company spin-offs with the goal of producing a slimmer headquarters system.

・As a result of these changes, Corporate Administration will switch from two groups, seven divisions, 31 departments and 76 sections, to 22