Conclusion of Rights Issue and Acquisition of Land
for New Factory by KOKUYO Camlin Limited

OSAKA, Japan, October 11, 2013 - KOKUYO Camlin Limited, an Indian subsidiary of KOKUYO S&T Co. Ltd., has recently finished raising a total of approximately one billion rupees (about 1,600 million Japanese yen) from a rights issue (allocation of new shares) of 31,283,831 shares (the number of outstanding shares before allocation: 69,018,975) at the unit issue price of 33 rupees per share. KOKUYO S&T Co., Ltd., was allocated 31,134,900 shares of the rights issue by which its equity ratio was raised from previous 50.47% to 65.77%. Simultaneously, KOKUYO Camlin Limited agreed with MIDC (Maharashtra Industrial Development Corporation of India) to purchase the land of 14 acres (approximately 56,000 m²) in the Patalganga Industrial Complex, located about 75 km southwest of Mumbai, from MIDC. This will be the second largest among the factories in the KOKUYO Group’s stationery business.

In the KOKUYO Group, KOKUYO S&T Co., Ltd. entered into the Indian stationery market by acquiring a majority of shares of Camlin Limited, a large long-established stationery company of India in October 2011. With this acquisition, KOKUYO S&T gained the management structure comprising sales/logistics networks that cover the entirety of India, production bases of five factories and ink technology, brand power that has been developed in the history of more than 80 years, and upgraded manpower, institutions, and IT systems. The new company has pushed forward the modernization of management as KOKUYO Camlin Limited (headquartered in Maharashtra State and listed in Indian NSE/BSE) for these two years since the acquisition. On the other hand, it has carried out a study of investments for future growth by reviewing the production system aiming at improving production capacity and lowering cost and introducing an ordering system that optimizes inventories in order not to lose growth opportunities in India that are expected to rapidly expand on a middle-term basis. (As one of its means, the company has recently purchased local notebook manufacturer Riddhi Enterprises for the purpose of expanding the notebook business.)

While increasing business efficiency by proceeding with the restructuring and concentrating of factories scattered in Maharashtra State in reference to the existing merchandise of KOKUYO Camlin Limited (markers, forming/assembling of writing tools, spare lead for mechanical pencils, glues, etc.) to the new factory, KOKUYO Camlin Limited will improve the supply power from a substantial reinforcement of production capacity, aim at cost reduction by an increase in the in-house production ratio, and upgrade value-added power for development and quality. By which, the Group company aims to secure surplus strength for future growth, improve competitiveness in the Indian domestic market where competition is intensifying, and develop the export business for Asia, the Middle East, and Africa. The new factory is expected to start full-fledged operation in early 2016 because the estimate is that more than two years are required for development of land, construction of buildings, and the introduction of facilities. Also, it will be an environmentally friendly factory that utilizes solar heat, rainwater, etc.

If you have any question on this matter, please access the following URL

https://www.kokuyo.com/en/contact/

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