TOKYO(October 29, 2002)--In cooperation with leading Taiwanese general foodstuff manufacturer DaChan Great Wall Group (Chairman: Charles C.Y. Han), Showa Sangyo Co., Ltd. and Nissho Iwai Corporation have come to an agreement to establish a company in Tianjin, China, for the production and sales premixed powder products such as breader mix. The company, whose annual production capacity of 8,400 tons will be the largest in China, expects annual sales of 1.2 billion yen in 5 years' time.

In recent years, there has been a significant increase in the number of Japanese food manufacturers making inroads into China in order to manufacture competitively priced processed food for the Japanese market, utilizing the cheap labor and abundant agricultural and fishery product resources available there. Consequently, bases for the supply of premixed powder products, which capitalize on advanced Japanese technology, are required in China. In addition, domestic infrastructure development for the 2008 Beijing Olympic Games is progressing rapidly, and China continues to experience high economic growth. Food service industries, such as fast-food chains and foreign investment distribution chains, are quickly moving into China, particularly in urban districts, and advances in the diversification (westernization) and globalization of eating habits are expected.

Following such trends, the demand for sugar-free premixed powder products (breader mix, batter mix, tempura batter mix, etc.) is expected to expand rapidly. Thereupon, the three companies have reached an agreement to establish a new company with the intention of carrying out production and sales of premixed powder products in China. The new company will be established through cooperation between Showa Sangyo who, as Japan's leading sugar-free premixed powder product manufacturer, will provide the production technology, Nissho Iwai, who will contribute their trading expertise and operations bases from their extended Chinese sales network, and DaChan Great Wall Group, which undertakes milling, formula feed and livestock business, who will contribute their achievements and sales outlets in China.

The company, to be established in December 2002, will commence production next spring, and will actively carry out sales focusing on Japanese processed food manufacturers and fast-food chains.

[Outline of the New Company]