ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it has reached an agreement with CALBEE, Inc. (headquartered in Chiyoda-ku, Tokyo; Shuji Ito, President & COO; hereinafter “CALBEE”) and Master Kong Instant Foods Investment (China) Co., Ltd (headquartered in Tianjin, China; Pai-king Chang, Representative; hereinafter “Tingyi Investment”) to establish a snack manufacturing company in China by July 2012. We expect to commence the operation of the factory and product sales by the end of fiscal year 2012.

The snack market in China is said to be worth approximately 150 billion yen, and continues to achieve an average annual growth rate of over 10%. Although per capita consumption is still less than one hundredth of one in advanced countries, the Chinese snack market is projected to continue to post double-digit growth rates in the long term, reflecting lifestyle changes due to economic growth in China.

The joint venture aims to introduce and establish the brand as soon as possible in China through the technology and know-how offered by CALBEE, the frontrunner in the Japanese snack market, for the promotion of product development in a joint effort with Tingyi Investment, and through the use of the distribution network and sales strengths of the Tingyi Group, the largest player in the instant noodle and beverage industries in China. Specifically, the desired target for the joint venture is to capture a share of 10% in the Chinese snack market within five years from the launch of the business.

Tingyi Investment is an affiliate of the Ting Hsin International Group (China headquarters located in Tianjin, China; Ing-Chou Wei, Director-General), in which ITOCHU holds an equity stake. The entry into the snack industry forms part of ITOCHU’s commitment to the food and retail market in China, where ITOCHU and the Ting Hsin International Group have been jointly accelerating development. Moreover, ITOCHU has been seeking to construct a system that enables the reliable supply of safe, secure foods in major centers for the supply of agricultural products in China, as part of its efforts to establish food resources supply systems in the upstream. ITOCHU will promote its global SIS(*) strategy in China by establishing a system for supplying raw ingredients such as potatoes to the joint venture.

• Abbreviation of the term “Strategic Integrated System.” The SIS strategy seeks efficiency in production, distribution and sales by vertically integrating the upstream (food resources development, manufacture and processing), midstream (intermediate distribution) and downstream (retail marketing), and by placing consumer needs at the starting point.

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