Notice of Establishment of Joint Venture for Production of Liquid Soft Serve Ice Cream Mix for the Chinese Market

July 21, 2009

ITOCHU Corporation, NISSEI CO., LTD. (Ibaraki, Osaka; President: Toshiaki Tanaka) and China's Yantai Beer Group Co., Ltd. (Yantai, Shandong, China; President: Qu Jiguang) this April in Yantai, Shandong, China established a joint venture, YANTAI NISSEI FOOD CO., LTD., to produce and sell liquid soft serve ice cream mix for the Chinese market, and have now begun construction of a plant.

We believe we can also make the soft serve ice cream business a success in the Chinese market by taking advantage of the expertise of NISSEI CO., LTD. in production and sales in the soft serve ice cream business cultivated in Japan over many years, the ITOCHU Corporation's worldwide raw material procurement network as well as its sales network in China, and the network of the China Yantai Beer Group Co., Ltd. in China that has been nurtured through decades of establishing businesses in the Chinese market.
The soft serve ice cream market in China currently centers around sales in major restaurant chains and many other restaurants and retail stores have yet to sell the product. Nevertheless, the market is already seen as having a size with a similar quantity basis to the Japanese market.

Going forward, the NISSEI CO., LTD., ITOCHU Corporation and China Yantai Beer Group Co., Ltd. are resolved to work together and exert maximum effort so that the consumers in China can enjoy tasty and safe soft serve ice cream and, in particular, a system will be established to procure safe milk from contract dairy farmers in order to carry out production.

YANTAI NISSEI FOOD CO., LTD. will commence production and sales from January 2010, aiming for sales of 56 million liters on a quantity basis and 10 billion yen on a value basis of liquid soft serve ice cream mix in 2015.

In addition, NISSEI CO., LTD. and ITOCHU Corporation intend to collaborate on the sales of not only liquid soft serve ice cream mix but also soft serve ice cream cones and freezers to produce the product in stores, and the two companies plan to present the Chinese market the business model of selling all materials necessary for soft serve ice cream sales—liquid mix, cones and freezers—as NISSEI CO., LTD. does in the Japanese market.

Profile of Joint Venture

Representative President: Ryosuke Yahashi (Executive Vice President, NISSEI CO., LTD.)
Headquarters location No.490 beiguan street muping district Yantai,China
Established April 14, 2009
Business description Production and sales of liquid soft serve ice cream mix
Capital $10.68 million
vestment ratio NISSEI (64%), ITOCHU Group (19%), Yantai Beer Group (17 %)