OSG group (hereafter "the group") has revised its new three year management plan for FY2009 to FY2011, "The Next Stage 09" and announced "The Next Stage 10"(for FY2010 to FY2012.) The outline of the plan is as follows;

Management Strategy

1. Basic Strategy

The group will improve corporate value by fortifying the foundation of its core products, taps, end mills, drills, and rolling dies and targeting to become the top global manufacturer of hole-making cutting tools.

1. -Improve quality, cost, delivery, and technical proposal capabilities by solving technical and any other related problems to the core products.
2. -Take measures to increase sales outside Japan.
3. -Focus on cash flow management and maximize operating cash flow.
4. -Maintain agile management by clarifying growth strategy and visualizing results.

2. Marketing Strategy

While the group had placed an emphasis on automotive, mold & die, and aerospace industries, it has decided to expand the focus of industrial markets in order to obtain stable order in take.

[Automotive Industry]
Expand the market share of carbide drills, PCD tools, and rolling dies by taking advantage of tap customers. Focus on the application of tools to axels and transmissions.

[Mold & Die Industry]
Expand sales to major mold manufacturers and mold-making departments of existing customers.

[Aerospace Industry]
Promote product development for machining difficult-to-cut materials and technical proposals.

[Energy Industry]
Expand sales for turbine parts globally.

[Construction equipment Industry]
Focus on the major companies of the industry.

[Precision machining]
Develop the market by promoting small-sized precision tools.

[Forming]
Increase rolling dies sales for auto screws and parts. Develop overseas (esp. Asian) market.

[Medical Industry]
Investigate market and companies, and promote product development.

3. Production Strategy

The group promotes total optimization of production capacity in manufacturing facilities located in over 12 countries, and improves the competitiveness of quality, cost, and delivery.

4. R & D Strategy

The group concentrates its management resources on high value-added technology in growing markets, and promotes know-how establishment of production engineering.

5. Sales Strategy

1. -Invest resources in Asian market.
2. -Focus business activities on major customers in Japan.

6. Operation Strategy

1. -Promote operation streamlines.
2. -Promote employee development and distribution of employees for global operations.

Management Target

Because of the variable management environment, the management target for FY2012 will not be announced at this moment.

January 12, 2010
President & COO Norio Ishikawa