News Release

Yamanouchi Pharmaceutical Co., Ltd.

Yamanouchi Closes Plant of Its Subsidiary in Taiwan
- Accelerating Review of Its Production System to Further Increase Efficiency -

February 20, 2003

  Tokyo, - February 20, 2003 - Yamanouchi Pharmaceutical Co., Ltd. ("Yamanouchi"; President and CEO: Toichi Takenaka) announced that it has decided to close the formulation plant of Taiwan Yamanouchi Pharmaceutical Co., Ltd., its subsidiary in Taiwan ("Chureki Plant" address: Ping-Chen City, Tao-Yuan Hsien, Republic of China), in June 2004. Yamanouchi is reviewing its production system in order to enhance its global competitiveness by further streamlining its production system. The closure of Chureki Plant is part of that effort.

  In Taiwan, Yamanouchi has been steadily expanding its business for nearly four decades since it established Taiwan Yamanouchi and started production and supply of in-house products in 1963. The Taipei Branch Office was opened in 1987 to start independent marketing. Chureki Plant has played a central role in formulating and packaging the Yamanouchi's main products in Taiwan such as the Calcium antagonist Perdipine for hypertension and the treatment for peptic ulcers and gastritis Gaster.

  At present, Chureki Plant manufactures over 40 products but its facilities are getting obsolete, and how to increase production efficiency has been one of the major challenges for Taiwan Yamanouchi. Deregulations implemented in 2002 have made it possible for pharmaceutical companies in Taiwan to almost completely outsource production of their own products. In addition, the environment related to the production and import and export of drugs has changed due to measures such as reduction in import duties following Taiwan's affiliation with the WTO. Such changes in the business environment in Taiwan have reduced the need for the company to have its own production plant, and this is in the background for the decision to close Chureki Plant. Taiwan Yamanouchi will review the products it is currently dealing with and outsource their production to major pharmaceutical companies in Taiwan on a step-by-step basis to completely close the plant in June 2004.

  Yamanouchi has established a global production system with bulk drug substances production facilities in Japan (Takahagi, Ibaraki Prefecture) and Ireland and formulation plants in Japan (Yaizu, Shizuoka Prefecture, and Nishine, Iwate Prefecture), Europe, the United States, and Asia. It has already closed two formulation plants in Japan (Azusawa Plant in Tokyo and Kaisei Plant in Kanagawa Prefecture) to streamline its production system. It will continue to review its production system in order to further strengthen its global competitiveness.