IR Information(IR情報) 2006/10/2

Meitec Corporation

Meitec Announces the Establishment of Wholly Foreignowned (100% Owned by Meitec) Jobtraining Service Company in Xian, China and Conversion of the Joint Venture Company in Hangzhou as Its Subsidiary

-Meitec Expands Job-training Services in China-

Meitec Corporation (Headquarters: Minato-ku, Tokyo; President, CEO and COO: Kosuke Nishimoto) announced today that it obtained permission on September 14, 2006 for a wholly foreign-owned (100% owned by Meitec) job-training service in Xian, China, targeting Chinese engineers, and that it will establish Meitec Xian TechnoCenter Co., Ltd. in Xian, Shanxi, China, making it the Meitec Group’s fourth job-training service company in China, as detailed below.
Furthermore, with regard to ZHEJIANG MI High Technology Co., Ltd. (capital : 6 million RMB; Meitec’s shareholding ratio: 49%) which has already been established in Hangzhou, Meitec also announced that it would increase its capital by 3 million RMB and turn it into its subsidiary.

1. Background to the New Company’s Establishment

To respond with the movement of Japanese manufacturing corporations expanding into inland China and setting up comprehensive R&D centers, Meitec will establish Meitec Xian TechnoCenter Co., Ltd. as its fourth job-training service company, following centers in Hangzhou, Dalian and Guangzhou. With regard to this company, Meitec has obtained permission for 100% Meitec ownership and, given that Chinese job-training service companies are extremely difficult to establish, this is evidence that the significance of its operations have also been recognized in China. Furthermore, with regard to ZHEJIANG MI High Technology Co., Ltd., which had already been established in Hangzhou, Meitec will obtain permission to increase its capital, giving us a capital ratio of 66% in the company and making it a subsidiary. Since Meitec owns 95% of shares in the Dalian and Guangzhou companies, and 100% of shares in Meitec Shanghai, the operational stability of its Chinese operations overall has increased further, enabling us to create a more flexible business system.
The securing and use of engineers has become the greatest challenge for Japanese corporations planning to expand R&D into China. With regard to human resources from China, with its own culture, naturally there are differences between Chinese and Japanese ways of working and thinking about work, and career turnover also tends to be fast. Furthermore, from the perspective of the current balance of supply and demand in the labor market, employing outstanding personnel is problematic for Japanese corporations, and it is extremely difficult to continue with the training of personnel who are employed. After targeting mechanical, electrical and control engineers who will be vital for the creation of R&D centers for Japanese corporations in the future, focusing on practical and human resource training accumulated by Meitec over the years, and developing human resources for R&D, Meitec’s Chinese operations offer the services of these human resources to Japanese corporations through the Meitec Group business network.
Together with the three existing companies, the supply line of human resources has been upgraded to a full line through the establishment of this limited company, providing human resources to the east China region including the Shanghai coast where R&D centers are concentrated; the northeast and north China regions, which act as a hub for Japanese corporations; the south China region, which is undergoing mass development centered on the automobile industry; and inland China, where extensive future growth is expected.

 
2. Profile of the New Company
 
(1) Company name   Meitec Xian TechnoCenter Co., Ltd.
(2) Location   No. 68, Keji 2nd Road, Xian High-Tech Industries Development Zone, Xian
(3) Principal operations   Job-training services for Chinese engineers (in the mechanical, electrical and control fields)
(4) Paid-in capital   1.2 million U.S. dollars
(5) Shareholding ratio   Meitec Corporation 100%

 
3. Conversion of ZHEJIANG MI High Technology Co., Ltd. into a Subsidiary

The joint venture company, ZHEJIANG MI High Technology Co., Ltd., which was already established in Hangzhou, will become a subsidiary of Meitec as a result of its obtaining permission to increase its capital and acquiring a greater share of the company. This will increase the company’s operational flexibility and enable us to further expand operations.
 
(1) Company name   ZHEJIANG MI High Technology Co., Ltd.
(2) Capital after adjustment   9 million RMB
(3) Shareholding ratio after adjustment   Meitec Corporation 66%, Insigma Technology Co., Ltd. 34%
(4) Closing date for capital increasing procedures   October 10, 2006

 
4. Future Developments

Using its fourth job-training service company, Meitec will be able to increase the speed of its Chinese engineer staffing services bridge engineer service in Japan as well as the human resource supplying capabilities within China. Furthermore, in addition to investigating and considering further business developments within China and extensive developments in the Asian region, Meitec will continue to expand its operations in the light of Japanese corporations’ needs.

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