Hitachi Invests in Amtrex; Sales of Hitachi Brand Room Air Conditioners to Start in India.

NEW DELHI, India and TOKYO--(BUSINESS WIRE)--Dec. 28, 1998-- Hitachi, Ltd. (NYSE:HIT), today announced its decision to take an equity position in Amtrex Appliances Limited as part of its strategic move into the Indian market.

Amtrex, a part of the Lalbhai Group, is the third largest room air conditioner player in India. After Hitachi's equity participation, the joint venture company will introduce new models of window and split air conditioners before the summer of 1999.

Under the agreement announced today, Hitachi will invest about Rs. 160 million (approximately 500 million yen) to acquire preferential shares of Amtrex bringing its shareholding on par with the current promoters -- the Lalbhai group. Hitachi and Lalbhai Group will hold an equal stake of 35.2% each in the enhanced equity of Rs. 146.7 million (approximately 450 million yen) of Amtrex.

Following Hitachi's investment, the company name is proposed to be changed to Amtrex Hitachi Appliances Limited. The Amtrex board will be reconstituted with Hitachi nominating new Directors, including a Joint Managing Director. The Chairman & Managing Director of JV company will continue to be nominated by Lalbhai group. Hitachi will also assign expatriates to work in the JV company in the areas of engineering, design & quality assurance.

Hitachi and Amtrex have been working together on new products for Indian market for the last two years. Hitachi's equity participation will be followed by the first time entry of Hitachi brand in the Indian consumer durable market just in time for the critical Indian summer of 1999. Presently, Hitachi brand will co-exist with the current Amtrex brand, helping the JV company to offer a comprehensive range of products for various market segments.

Since the liberalization of Indian economic policies in 1991, room air conditioner market has steadily grown to about 400,000 units in fiscal 1997. It is expected to continue to grow at about 15-20% per annum to cross one million units in the next five years. Hitachi and Amtrex have been working together in the Indian market since 1990, through their technical collaboration arrangement. Focussing on the changing needs of this high growth market, the relationship was further strengthened with a new licensing arrangement concluded in April 1998. It covered provision of technology for development of several new tropical models of window and split air conditioners suitable for Indian conditions. The agreement also included assignment of Hitachi engineers and training of Amtrex personnel at Hitachi facilities in Japan and elsewhere.

Commenting on Hitachi's investment, Kyohei Kasaba, Board Director and Group Executive, Consumer Products Group, Hitachi, Ltd., said, "We expect to see a steady expansion of demand in the Indian market. Hitachi's decision to expand its scope of co-operation from provision of technology to participate in Amtrex equity has been taken from the long term view of harnessing this market potential and growth. Looking to the future, we hope to further expand our co-operation with Lalbhai Group."

While announcing the partnership, Sanjay Lalbhai, Chairman, Amtrex Appliances Ltd., said, "We welcome Hitachi's decision to play a greater and more active role in Amtrex and India. The Lalbhai Group, together with Hitachi, is committed to build and maintain a position of eminence in the room air conditioner market. We plan to further synergise Amtrex's nation wide sales and service network together with the continuous flow of latest Hitachi technology to expand our business in India. We hope to further extend our co-operation with Hitachi to room air conditioner export business to some of the tropical countries and also for other Hitachi products in the Indian market."

Amtrex Appliances Ltd., a part of the Lalbhai Group, one of India's leading Industrial conglomerates, is headquartered at Ahmedabad in Gujarat. Founded in 1984 Amtrex has two manufacturing facilities at Kadi and Silvassa to manufacture room air conditioners as per Hitachi specifications. The funds generated out of increase in Amtrex equity will mainly be used to further expand and upgrade its manufacturing facilities. Amtrex has a nationwide sales, distribution & service network with five regional offices in major Indian cities, which will be further strengthened and expanded to meet the intensifying competition in the Indian market.

With the new Hitachi brand models, upgrade of manufacturing and design facilities and the invigorated sales and distribution network, Hitachi and Amtrex are confident of becoming a dominant force in the future room air conditioner market.

Hitachi, Ltd., headquartered in Tokyo, is one of the world's leading global electronics companies, with fiscal 1997 (ended March 31, 1998) consolidated sales of 8,417 billion yen ($ 63.8 billion (a)). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi's Web site at http://www.hitachi.co.jp.

(a) At an exchange rate of 132 yen to the U.S. dollar.