Kawashima Selkon Textiles Co., Ltd., which is a member of the LIXIL Group, held a tapestry exhibit called "Flowers and Birds of the Four Seasons" at the World Exposition, Paris in 1889, where it won the gold award. Kawashima also took top honors at the Chicago Exposition in 1893, and went on to win the Grand Prix at the Paris Exposition of 1900, thereby demonstrating to the world the sophistication of Japanese weaving techniques. Worldwide recognition of fine, intricate Japanese design is not merely limited to textiles, but extends to the tiles and other areas. In addition to design, we believe that smart and attractive products that feature technologies that Japan is famous for, not the least of which are energy- and water-saving technologies, will become a major strategic advantage in overseas expansion.

The LIXIL Group's forays overseas, which began as moves to establish manufacturing centers to meet Japanese domestic demand, as exemplified by the establishment of Tostem Thai Co., Ltd. in 1987 and Suzhou INAX Sanitary Fitting Co., Ltd. (China) in 1996, have gradually expanded in scope. Particularly worthy of note is the joint venture INAX Vietnam Sanitary Ware Co., Ltd. (VINAX), set up in 1996. VINAX is not only a manufacturing company, it has also worked at cultivating the local market. It has expanded its business in concert with the growth of the Vietnamese economy, and now enjoys the highest market share in Vietnam for sanitary wares. The LIXIL Group's overseas bases now not only function as manufacturing centers to meet Japanese product supply, they have also evolved to the point where they have started fulfilling the sales demands of the local market.

At the same time, in recent years the Group has been actively pursuing M&As with companies overseas. For example, American Standard Asia Pacific, which became part of the Group in 2009, enjoys a high level of brand recognition throughout Asia. We are leveraging that brand power and inherited sales network to expand our lineup of plumbing fixtures available in Asia. If we succeed in implementing high-quality, high-performance manufacturing technologies, then more effective synergies can be achieved, and we will be able to offer top-grade, quality products throughout the Asian market. We are expanding our sales networks through partnerships with LG Hausys, Ltd., the core company of Korea's LG Group, and the Haier Group, China's top manufacturer of home appliances. In June of 2011, LIXIL joined forces with Haier to form the Haier-Lixil Architectural & Interior Design Co. (Shanghai). Preparations are also underway to establish a joint venture to manufacture kitchens, interior doors, and other lifestyle fixtures. The Chinese housing market had been dominated by what some have termed "skeleton sales", in which builders put together the structural frameworks of houses and leave the interior and the rest to others. However, we are committed to spreading our style of sales that includes interior finishing with a range of high-quality products and guarantees as a builder/installer, thereby establishing B-to-B trust with designers and owners alike and expanding our business as a result.

It goes without saying that M&A is important in the area of commercial building material business, and not just the residential housing market. In January of 2011 we welcomed to our ranks Shanghai Meite Curtain Wall System Co. Ltd., and with them we shall receive new orders throughout China's economically developing cities. Furthermore, in December of 2011, the world's top manufacturer and seller of curtain walls (aluminum exterior wall materials for high rise buildings) and interior building materials for commercial buildings, a company called Permasteelisa S.p.A., became a member of the Group. Permasteelisa has been involved in some of the most iconic and best-known specimens of architecture in the world, including the Sydney Opera House, the Guggenheim Museum Bilbao (Spain), the Shanghai World Financial Center, and others. Founded in 1973, Permasteelisa Group now has about 50 companies in 27 countries on four continents, as well as 13 production facilities. It not only boasts the most advanced engineering and design technologies, its workforce includes the most brilliant minds in the world of modern architecture, and these are the assets that has enabled it to design and construct some of the world's most leading edge and avant-garde construction projects. In partnering with a company that has this kind of record in its project abroad, the LIXIL Group hopes to gain a healthy exposure to variety of values and learn as much as it can in the process.

The LIXIL Group has a long history of high-quality, intricate design, one which shows in the detail of its products. It also has the advanced technological capabilities to deliver safe and high-quality products. Moreover, the LIXIL Group is committed to innovation in the field of advanced environmental technologies, including energy and water conservation, recycling, and green energy production. The exhibit of foam spas at the Milano Salone 2011 received high marks and was acknowledged as a potential force by virtue of its comprehensive networks. The fusion of intricate design abilities, advanced technologies, and the kind of sensibilities conducive to pursuing the goal of comfort, will help bring about a revolution leading to new lifestyles.
Utilizing the assets it has acquired in Japan, contributing to the global community, and showing examples of new collaborations that will change the face of business窶蚤s one of the few conglomerates in the world in the housing industry, LIXIL aims to construct a new business model for the world stage and become a true global leader.