Japan's population is aging more rapidly than any other. As the baby boomer generation becomes older, the number of senior citizens is projected to increase by 1 million every year. According to estimates, senior citizens will account for 40.5% of the population, or 36.46 million people, in 2055^(*1). Therefore, lowering the cost to society of medical and health care in preparation for the coming of this ultra-aged society has become a worrisome issue and a pressing task in Japan.
By providing solutions to such social problems and strengthening businesses related to health and medical care areas, ITOCHU aims to create and develop new sources of earnings. Because health and medical care businesses cover an extremely diverse range of areas, collaborations beyond industry boundaries are indispensable. Precisely for this reason, ITOCHU can bring its strength to bear on the field based on its contacts and expertise in all kinds of industries and its extensive range of trading-company functions.
Based on its medical value chain concept, ITOCHU is aggressively using mergers and acquisitions (M&As) and other capital measures to build a business model in upstream handling of medical devices, midstream pharmaceuticals distribution, and downstream businesses for hospitals.
In the medical device business area, we are expanding and improving our operational platform centered on subsidiary Century Medical, Inc. In 2008, we further strengthened our operations in this business area by investing in leading manufacturers in the field of treatment and diagnosis, including Japan Medical Dynamic Marketing Inc., in the orthopedic medical equipment area, and Goodman Co., Ltd., in the area of equipment for cardiovascular internal medicine.
In 2008, ITOCHU and other various companies jointly established the Japan Medical Partners corporate alliance to formulate countermeasures for the new influenza pandemic. ITOCHU serves as the secretariat for this alliance, which has created a system to provide devices for infection prevention, emergency measure and transportation of those devices for the national government, local governments, and companies.
In the downstream area, in which we help hospitals improve their business management by providing services for the onestop outsourcing of operations and management support, in 2008, together with a partner company, we won a contract for the PFI^(*2) operations of Kobe City Medical Center General Hospital. Further, subsidiary Healthcare-Tech Corporation contributes to the efficiency of many hospitals through its SPD^(*3) operations, which take advantage of IT and outsourcing to realize integrated procurement of pharmaceuticals and medical materials, inventory management, and logistics.
In the wholesale distribution of pharmaceuticals and medical materials, Healthcare-Tech also sells generic pharmaceuticals. Going forward, we intend to create pharmaceuticals distribution models with new pharmaceuticals in mind. In 2010, ITOCHU took steps to expand its overseas business, through capital investment in China's Promed Medical Tech. (Suzhou) CO., Ltd, a Chinese medical device manufacturer, together with ITOCHU (China) Holding Co., Ltd., and Goodman Co., Ltd. It also established Hubei Kyoso Pharmaceutical Co., Ltd., a joint venture for the wholesale of pharmaceutical products, medical equipment, and health related products in China together with TOHO HOLDINGS CO., LTD, and Jointown Pharamaceutical Group Co., Ltd.
Taking as its fundamental stance the simultaneous pursuit of business activities and social contributions, ITOCHU will continue to develop and implement new business models.

• *1 Statistics and estimates concerning demographic trends Source: The Cabinet Office
• *2 PFI (private finance initiative): A method of social infrastructure development that entails using private-sector expertise and capital to design, construct, maintain, and operate public facilities as well as providing public services efficiently by having private-sector companies manage them
• *3 SPD: Supply Processing & Distribution