Financial Overview

(in million JPY)	FY2006	FY2005	Rate of Change(%)	Factors
Overall
Sales	591,518	503,370	17.5	Sales increased, as the Company maintained the same level of sales volume as that of the previous year with current program business but in addition won new orders.
Operating Profit	38,865	45,052	(13.7)	Operating profit was down, being negatively impacted by materials price hikes and lower selling prices of electronic materials and functional parts for automobiles because of intensified competition.
Ordinary Profit	56,585	50,487	12.1	Ordinary profit was up due to an increase in gains generated from security investments in the copper business.
Net Profit	31,370	23,374	34.2	Net profit increased as a result of profits generated from transferring the copper refining business.
Parts Manufacturing & Assembly Division
Sales	161,756	159,311	1.5	*1
Operating Profit	1,585	2,883	(45.0)	Operating profit significantly dropped due to lower selling prices, an increase in steel prices, and a rise in costs to improve product quality.

*1: Highlights of the assembly and processing division

Functional components for automobiles
- Production volume for the fiscal year that ended March 2007 amounted to 106,200 million yen.
- Sales were down from those of the previous year due to a decrease in sales volume of new cars in Japan and the U.S., the growing trend in customers to choose mini vehicles rather than higher-priced vehicles, and lower selling prices due to intensified global competition by automakers.

Die-casting products
-  Production volume for the fiscal year that ended March 2007 amounted to 12,400 million yen.
- Although the sales volume of aluminum die-casting products increased in response to the great need for lightweight parts, total sales decreased compared to those of the last year due to decreasing needs for magnesium die-casting products and weakened selling prices.

Automotive catalysts
- Sales of automotive catalysts for the Japanese mini-vehicle market increased due to strong sales of new cars. Total sales increased from those of the preceding year.

Business plans
-Strengthening automotive components business
The Company will step up its development and sales activities for automotive products in line with its plans to reinforce the die casting business. Up until now, the Company's die casting operations have been centered on production of home appliances; but the Company now intends to move to more profitable lines of business-automotive components-in order to develop a highly profitable structure. Aiming to receive volume awards and win more businesses from existing customers, the Company will focus on profit-earning products such as multi reflectors for head lamps.(From an article in the Nikkan Jidosha Shimbun on Nov. 06, 2006)

The Company will strengthen its catalyst business for the treatment of automobile exhaust gas. In addition to substantially increasing capacity at its site in India, the Company will aim at raising production at its Chinese site, to be operational in the autumn of 2007, to the full at an early date. The Company expects that these efforts will more than double its annual manufacturing capacity on a global level to about 14 million units by 2010. In order to enhance profitability, it will designate prospective motorcycle markets in China, which is tightening emission control, and Southeast Asia as its main targets. The Company has developed catalyst business globally through its sites in Japan, Thailand and India. Additionally, it established a plant in Zhuhai, Guangdong Province, China in October this year, which will begin operations in October 2007.(From an article in the Nikkan Jidosha Shimbun on Nov. 17, 2006)

The Company will begin producing automotive door locks in India in a bid to strengthen and expand its overseas business. It will install a new line in its existing emission catalyst factory to start production by autumn 2007 at the latest. For the time being the Company will supply door locks to Honda's site in India, but plans to expand sales to other automakers, as well. The Company, which currently manufactures door locks in five countries including the USA, Thailand, the UK, and China, is making efforts to optimize its product items and manufacturing sites on a global level as seen in producing modules in Japan and the U.S. and augmenting production capacity at its site in China.(From an article in the Nikkan Jidosha Shimbun on Nov. 25, 2006)

The Company will realign its product array for the automotive industry, bringing into view withdrawal from some unprofitable businesses. The Company, which acquired Ohi Seisakusho Co., Ltd. in 2003, has been working on bolstering its automotive division by reinforcing development and production of exhaust gas catalysts and other related products. Following the production discontinuance of seat rails and roof rails, the Company eyes the possibility of pulling out from window regulator business and other unprofitable areas, recognizing such measures are crucial for concentrating management resources on promising business sectors. On the other hand, the Company will increase the lineup of its core products, which include slide door modules, door locks, and catalysts, for global use.(From an article in the Nikkan Jidosha Shimbun on Jan. 23, 2007)

Challenges for the fiscal year that will end March 2008
In the functional parts business for automobiles, specifically door locks, the Company will work to enhance its competitive-advantages in terms of lowering costs by consolidating production operations into its plants in China and Thailand and purchasing parts locally in the countries. At the same time the Company will establish a production control system to mange the diversified production operations being conducted as a result of transferring production overseas. 

R&D structure
- The Company mainly conducted R&D activities at its main laboratory and worked on its Chief Technology Officer (CTO) project. 

R&D expenses

(in million JPY)	FY2006	FY2005
Corporate	7,359	6,019
Parts Manufacturing & Assembly Division (as a % of total R&D expenses)	1,956 (26.6%)	1,817 (30.2%)

Parts Manufacturing & Assembly Division
- R&D activities at the Parts Manufacturing & Assembly Division are focused on automotive functional parts and die-casting products. 

Major R&D achievements:
- The Company developed functional parts such as door locks; it also systemized and modularized functional products and other items. 
- The Company developed new, high-performance automotive catalysts
- The Company developed environmentally friendly surface treatment technology for aluminum die-casting products.
- The Company developed auto parts surface treatment technology. 
- The Company developed urea water sensors for an emission purification system designed for diesel engines.

Capital investments

(in million JPY)	FY2006	FY2005
Corporate	40,300	45,100
Parts Manufacturing & Assembly Division (as a % of total investment)	5,400 (13.4%)	6,900 (15.3%)

Parts Manufacturing & Assembly Division
- The company spent 5.4 billion yen in the Parts Manufacturing & Assembly Division to improve productivity and maintain and revamp production equipment for door locks and other functional parts for vehicles.

Investment in overseas facility:
The Company announced that it will establish a new company for the production & sales of catalysts for automobile exhaust gas in Zhuhai, China. The new company, Mitsui Kinzoku (Zhuhai) Environment Technology Ltd., will be set up in September, 2006 and is due to kick off full-scale production starting October, 2007. The Company intends to boost its annual production capacity to 4 million units by 2010. It will be capitalized at 3.5 million USD and plans to initially employ 50 people. (From a press release on Oct. 10, 2006?ｽj

Planned amount of investment in FY2007 (as of Mar, 2007)

(in million JPY)	Planned amount of investment (FY2007)
Corporate	47,000
Parts Manufacturing & Assembly Division (as a % of total investment)	7,800 (16.6%)

Parts Manufacturing & Assembly Division
- Investment focus will be on improving productivity and streamlining operations at lines manufacturing automotive functional components.