July 19, 1999

Terumo Corporation to inaugurate blood bag production in India

Tokyo-based Terumo Corporation has signed a contract to acquire a 74% share of Peninsula Polymers Limited (Penpol Ltd.), a manufacturer and marketer of blood bags based in Trivandrum, Kerala, India. The new joint venture will be known as Terumo Penpol Limited.

India boasts the world's second largest population, and a huge expansion in the demand for blood bags is expected to accompany rapidly improving medical standards. Global blood bag manufacturer Terumo has been exporting blood bags to India, but due to import duties of over 40%, for some time the company has been investigating the option of local production to expand market share. The initiation of local production will give Terumo top share in the Indian market, enabling the company to cater to domestic demand for blood bags, expected to spiral in the years to come.

Penpol Ltd. was the first company to develop, produce and market blood bags in India, and is currently the top local manufacturer. The company has been a pioneer in promoting blood transfusion therapy. Penpol has been affected by competition from other domestic manufacturers, as well as the market entry of U.S. and other foreign manufacturers, but Terumo's advanced technology and introduction of capital should enable the new joint venture to expand market share.

Terumo Penpol's stock-holding ratio and company name will be registerd at the end of June, 1999, and shipments of products incorporating Terumo technology based on a technology sharing contract will begin in April, 2000. A three-fold increase in production capacity is planned over the next five years (to around 10 million bags/year).

Objectives

The aims of the new joint venture have been set forth as follows

1. To cater to domestic Indian demand for high quality blood bags with local production
2. To create a production base for blood bags for export to central and south American and African countries
3. To develop a store of knowledge on local production, marketing and business operations, in order to better serve the huge market India is expected to become in the 21st century

Mr. Balagopal, the current Penpol Ltd. president, will continue as managing director of the new joint-venture company.

Outline of new joint-venture company, Terumo Penpol Ltd.

Name	Terumo Penpol Limited
Address	Kochar Road, Sasthamangalam, Trivandrum, 695 010, India
Representative	C. Balagopal, Managing Director
No. of employees	Approx. 400 (at time of incorporation)
Predicted sales	Approx. \44 million in the first fiscal year
Corporate structure	Manufacture and sale of blood bags
Markets	India, South America, Africa etc.
Initiation of operations	Scheduled for March 2000. From June 1999 through March 2000 Penpol Ltd. will continue to sell the current product line, during which time Terumo technology will be introduced and production capacity expanded. Shipments of new products incorporating Terumo technology are scheduled to begin in April 2000.

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