Press Release

September 19, 2007

Nihonkaisui Co., Ltd.
APM Co., Ltd.
Advantage Partners, LLP

Announcement of the Sale of Nihonkaisui Co., Ltd.
Shares to Air Water Inc.

Advantage Partners, LLP (headquarters: Minato-ku; Tokyo, joint representative partners: Taisuke Sasanuma / Richard L. Folsom; hereafter “AP”) hereby announces that an agreement has been reached between a fund serviced by AP (hereafter, the “Fund”) and Air Water Inc. (headquarters: Osaka-shi, Osaka; representative director: Hiroshi Aoki; hereafter “Air Water”) whereby the Fund would sell 48.35% of Nihonkaisui Co., Ltd. (headquarters: Chuo-ku, Tokyo; representative director: Yoshiki Ueoka; hereafter “Nihonkaisui”) shares outstanding (9,887,210 shares) to Air Water. Nihonkaisui and the Fund believe that Nihonkaisui’s long-term enterprise value can be enhanced through this stock transfer, while maintaining Nihonkaisui’s autonomy.

Since the stock transfer of 2 salt manufacturing subsidiaries from Asahi Kasei Corporation to the Fund in July 2003, AP has been deeply involved in the management of Nihonkaisui and has engaged in various initiatives to support the enhancement of Nihonkaisui’s enterprise value. In particular, AP supported the execution of strategic M&A transactions amidst a more liberalized industry environment, namely the acquisition of domestic salt manufacturer Sanuki Engyo to make it a subsidiary in September 2005 and subsequent merger in April 2006, as well as the acquisition of Urashima Nori following its filing of protection under the Civil Rehabilitation Law in July 2005, in order to expand Nihonkaisui’s business domain towards foods. As a result, Nihonkaisui has become the leading player in the domestic salt manufacturing market with more than 50% market share, and has achieved increased competitiveness due to integration synergies of 3 salt manufacturing plants as well as expanding its business scope to secure a business foundation which allows for stable growth.

While Nihonkaisui was in the process of establishing an internal framework commensurate with its status as a leading company following the above improvements to its management foundation, the Fund and Nihonkaisui reached the conclusion that Air Water is the strongest candidate to become a new, stable shareholder in place of the Fund. Air Water has expressed its intent to hold Nihonkaisui shares for the long term, and its ample management resources will allow Air Water to provide support in a wide variety of areas such as finance, operations, M&A, and R&D in order to enhance Nihonkaisui’s enterprise value, while maintaining Nihonkaisui’s autonomy. The many similarities in the development history and logistics structures between the salt industry and the gas industry, Air Water’s main area of operations, will also allow Air Water to provide useful advice with respect to future management policies. Further, both companies have the concept of “water / sea water” at the core of their respective corporate principles and business domains and are highly compatible in terms of the directionality of long-term business development, suggesting the possibility of operational synergies between the companies. For these reasons, we believe that inviting a business corporation such as Air Water to become a long-term, stable shareholder has significant implications for Nihonkaisui, which has been expanding and reforming its operations under the Fund’s ownership, to achieve new heights going forward.

Going forward, Nihonkaisui plans to expand its operations with the support of Air Water, potentially creating new business lines to become the “sea water company” that the company strives to be. The current Nihonkaisui management team will continue to mange operations under the leadership of the current representative director, Yoshiki Ueoka. 1 external director will be invited from Air Water in order to maintain management transparency and objectivity, and 1 external auditor will be invited from Air Water in order to monitor company management, both replacing two of the officers dispatched from AP. While Nihonkaisui will become part of the Air Water Group following the stock transfer, the existing business strategy and management policies will be maintained under the spirit of autonomy. Further, the Fund will continue to support Nihonkaisui’s enterprise value enhancement efforts as a minority shareholder.