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Business Alliance Agreement with Thai Sugar Manufacturer - Sugar production and sales increase in Asian region -

2010-04-05

Toyota Tsusho Corporation (hereinafter referred to as "Toyota Tsusho"; Headquarters: Nagoya City, Aichi Prefecture; President: Junzo Shimizu) has announced a decision to conclude a business alliance agreement with the Wangkanai Group (hereinafter referred to as "Wangkanai"; Headquarters: Bangkok, Thailand; CEO: Aree Choonfung), a Thai sugar manufacturer, to build on the collaborative business relationship of the two companies.

1. Background and purpose for business alliance
Toyota Tsusho is aiming to maintain a well balanced profit structure by expanding business operations, which are for the most part in the automotive business fields, the company's core area, into non-automotive fields including food related businesses. In addition to the existing product trading business, Toyota Tsusho intends to extend the value chain for manufacturing businesses through participation in the sugar business, in order to offer a stable supply of sugar as a food source, as well as to improve its traceability to offer peace of mind and safety.

The Wangkanai Group, on the other hand, offers a large variety of safe products and is one of the foremost sugar manufacturers in Thailand. The company aims to build a foundation for supplying sugar with a stable quality and is primarily concerned with the manufacture and sale of sugar and sugar related products.

The sugar market is expanding with the globally increasing population and rising income levels of developing countries. Demand is expected to grow in the future, particularly in the Asian region. 

Against such a backdrop the concept of the companies coincided as they both aim to expand their shares in the Asian market by building a relationship of trust and forming a business partnership that takes advantage of their mutual strengths.

2. Details of business alliance and future business development
Toyota Tsusho intends to realize a framework for a stable supply of sugar, to enhance the company's quality control structure, while pursuing further improvements to customer satisfaction by taking advantage of the strengths of the both companies, such as the trading skills nurtured over many years and robust pipelines that connect distribution routes to various regions that Toyota Tsusho owns, as well as the expertise of manufacturing sugar and sugar related products and the sales skills at the Wangkanai Group, in order to implement the sugar business primarily in Japan, but also in the Asian region and developing nations, where significant growth is expected.

(1) Supply raw sugar to Japan, as well as the supply of raw sugar and processed white sugar to Asian markets
(2) Develop related businesses by utilizing the byproducts produced in sugar manufacturing processes

Furthermore, Toyota Tsusho will provide support for business operations at the Wangkanai Group, with the dispatch of personnel as a part of a personnel interchange that is made possible through the business alliance.

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