Hitachi and BSH Sign Broad-Based Home Appliances Cooperation Agreement.

Business Editors

TOKYO & MUNICH, Germany--(BUSINESS WIRE)--Oct. 30, 2000

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Joint Venture for Production of Front-loading Washing Machines to be Established in Thailand, and Cross OEM Product Supplies in Asia

Hitachi, Ltd. (NYSE:HIT), of Tokyo, and BSH Bosch und Siemens Hausgerate GmbH, of Munich, announced today that they have reached an agreement on entering into a broad-based cooperation in the home appliances market. As the first step of this cooperation, a joint venture to manufacture front-loading washing machines for Southeast Asia will be established in Thailand. The companies also expect to jointly develop a washer-dryer, which will mainly be marketed under the Hitachi brand in Japan. Furthermore, the two companies intend to enlarge their areas of cooperation in the Asian home appliances markets, such as room air-conditioners. Additionally, they also plan cross OEM product supplies in Asia.

The agreement will get under way with the founding of the joint venture and the setting up of a washing machine factory in Thailand. The new company, to be named BHST Washing Appliances Ltd., will be established by April 2001.

BSH will be contributing the technical expertise for fully automatic front-loader production, and Hitachi will contribute its know-how and the existing infrastructure of its subsidiary, Hitachi Consumer Products (Thailand) Ltd. The BSH Group will have a 60 per cent stake and the Hitachi group a 40 per cent stake in the joint venture, which will have a total capitalization of 220 million Bahts(a) (US$5 million).

"BSH's aim with this cooperation is to increase its laundry care activities in Asia by using European technology in the production of front-loading washing machines, for which there is increasing demand among the consumers in this region," said Dr. Herbert Worner, president and CEO of BSH.

"In Japan, Hitachi has the largest share of the washing machine market, helped by the high reputation of its 'Ion' series of high-washing-power models. Based on ecological and related considerations, and in anticipation of the expansion of the global market, Hitachi is moving to strengthen its international operations in the area of drum type fully automatic washing machines. Therefore, on the basis of our agreement, Hitachi and BSH decided to establish the new company," said Yoshihisa Uneyama, president & CEO of Hitachi's Consumer Products Group. The products will be marketed in the ASEAN countries, in Taiwan and in Oceania, under the brands BOSCH, SIEMENS and HITACHI. Hitachi will also market the products in Japan.

The washing machines used in Asia and in Europe use different technologies: Japan and other areas of Asia use the pulsator system, in which a pulsator in the washing machine is rotated to set up currents that move the washing load and water around and cleanses by rubbing the washing together. The pulsator system allows short washing cycles. Europe uses mainly the front-loading drum type system, in which the drum is rotated perpendicularly, which provides a washing effect by the washing load constantly falling from the upper part of the drum. The drum system uses water and detergent economically.

In 1999, world demand for washing machines was estimated to around 50 million units, with 38 per cent being the pulsator type and 42 per cent the drum type. Heightened global concerns over ecological issues and the importance of protecting the environment and reducing energy consumption are likely to boost demand for drum type washing machines. In Japan, too, the market for drum type washing machines is growing rapidly, as shown by the fact that sales this year are expected to reach 50,000 units, compared to 15,000 units in 1999.

About BSH

As an established global player employing more than 37,000 people, with 35 production sites, including in Germany, Greece, Spain, Turkey, Poland, Brazil, China and the U.S., and the global sales and customer service network to go with it, BSH Bosch und Siemens Hausgerate GmbH showed sales totaling almost DM 11 billion(b) (US$ about 4.6 billion) in 1999. The company was founded over thirty years ago, as a 50:50 joint venture between the well-known German electrical groups Robert Bosch GmbH of Stuttgart and Siemens AG of Berlin and Munich. As a manufacturer of the full range of home appliances, BSH markets its products mainly under the brands BOSCH and SIEMENS.

About Hitachi

Hitachi, Ltd., headquartered in Tokyo, is one of the world's leading global electronics companies, with fiscal 1999 (ended March 31, 2000) consolidated sales of 8,001 billion yen (US$75.5 billion(c)). 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://global.hitachi.com.

Outline of the New Company

Name:                      BHST Washing Appliances Ltd.
Location:                  Kabinburi Prashinburi, Thailand
CEO:                       Pending
Capitalization:            220 million Bahts (US$5 million)
Equity ratio:              BSH Group: 60%; Hitachi Group: 40%
                           (Hitachi, Ltd.: 35%; Hitachi Consumer
                            Products (Thailand): 5%)
Establishment:             Scheduled for April 2001
Start of operations:       Scheduled for January 2002

(a) At an exchange rate of 44 Bahts to the US$

(b) At an exchange rate of DM 2.35 to the US$

(c) At an exchange rate of 106 yen to the US$.