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News Release

2011 New Year Message from President (Gist of in-house message)
Masao Yoshida

January 4, 2011

A happy New Year to you all!

1. Furukawa Electric in 2010

When the new year began last year, the Japanese economy was recovering from the global slowdown in the wake of the Lehman Brothers collapse. Furukawa Electric announced its medium-term management plan New Frontier 2012 in April and launched a number of initiatives to execute the core elements of the plan: transforming our business structure, innovating our organizational climate, and improving our financial strength. Specifically, we set up new companies, started full production of new products, moved forward with the development of new environmental businesses, established a new cross-functional organization, reorganized our businesses, and took steps to raise awareness. I believe we pushed the frontiers and took a step towards growth in new markets and new businesses with you all last year.

Consolidated operating income, recurring profit, and net income all easily exceeded the year-ago level in the first half of fiscal 2010, reflecting increases in net sales in electronics, automobiles, and overseas transmission infrastructure.

However, we are facing challenging times, including a strong yen, shortening product life cycles, and intensifying completion with Asian countries, I believe we need to enhance our efforts.

2.Reforming the organization culture

We started last year to listen directly to staff working on the manufacturing floors at each plant about their efforts in safety, quality improvement, and compliance, exchanging opinions and considering initiatives with them. We will bolster our activities to promote safety, particularly at non-manufacturing bases including head office and branches this year.

As I constantly remind everyone, safety, quality, and compliance must come above all else. We will take additional action to strengthen these three items as important management issues.

3. Growth in new markets and new businesses

To achieve the medium-term management plan New Frontier 2012 that we established last year and grow successfully, especially in new environmental businesses, over the long term, the key is to rapidly develop our international operations. As represented by free trade agreements, markets are changing rapidly and becoming more borderless. Unless we approach unknown customers, we will not be able to grow. Meanwhile, companies in South Korea, China, and Taiwan are emerging as our rivals in every field.

First, I would like you all to be very aware that the fields in which you operate and your competitors are changing drastically. We can bolster our competitiveness in any market by identifying essential needs and providing excellent solutions speedily. I want each one of you to keep reminding yourself to identify global trends, anticipate changes, identify the essence of the changes, and achieve rapid innovation.

Finally, I hope that all of you and your families will enjoy another happy and vigorous year, continuing to pay close attention to health and safety.

Thank you for your attention.

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