OREANDA-NEWS. February 09, 2011. ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter ЃgITOCHUЃh) announced today that it will be undertaking business restructuring and alliance building initiatives with the GroupЃfs food companies, in an effort to enhance its system for the supply of safe and secure food materials and products and to increase sales and production efficiency in food manufacturing and in feed and livestock. Specifically, the alliances have been formed among Prima Meat Packers, Ltd. (headquartered in Shinagawa-ku, Tokyo; Tetsuya Matsui, President & CEO; hereinafter ЃgPrima MeatЃh), ITOCHU Feed Mills CO., LTD. (headquartered in Koto-ku, Tokyo; Akitomo Noto, President & CEO; hereinafter ЃgITOCHU Feed MillsЃh) and ITOCHU in the feed and livestock sector, and among Prima Meat, Yayoi Foods Co., Ltd. (headquartered in Minato-ku, Tokyo; Teruo Fujishima, President & CEO; hereinafter ЃgYayoi FoodsЃh) and ITOCHU in the food manufacturing sector.
1. The objective of the alliance

The operating environment in the domestic food market is becoming ever more difficult, given JapanЃfs shrinking population, falling birth rate, and aging society, as well as the slump in consumption caused by the economic downturn. With these conditions, competition in the food manufacturing, intermediate distribution, and retail industries is intensifying and change is continuing at a rapid speed, as firms reorganize, form groups, and expand globally.
As part of the enhancement and expansion of the global value chain that it is pursuing under its Strategic Integrated System (SIS) in the food area, ITOCHU announced business integration in the food distribution and marketing business in December 2010. This is the second round of initiatives for the Company, following talks and deliberations aimed at building a system that will enable it to pursue more consistent strategies and ensuring more tightly controlled and effective use of each companyЃfs management resources, to improve customer satisfaction and enhance the corporate value of the Group.
As a result of the alliance, the processes of manufacturing and sale of feed materials and livestock processed products will be further integrated, achieving business process efficiencies through increased traceability and shared sales channels in the feed and livestock sector. In the food manufacturing sector, a more efficient manufacturing and sales structure will be developed by sharing the manufacturing infrastructure, sales channels, and product development system, particularly for frozen and refrigerated food products. Through these efforts, ITOCHU will strive to enhance satisfaction for clients and customers. It will also consider operations in other countries such as China, with the aim of enhancing and expanding the experience and knowledge of the ITOCHU Group.
2. Areas and potential effects of business alliance

(1) Feed and livestock area
Increased quantity of safe and secure materials and processed products
ЃE Enhanced traceability for feeding, fattening and livestock processing
ЃE Increased efficiency through the groupЃfs centralized pig breeding business
Increased sales of livestock meat (pork and chicken)
ЃE Increased sales through the GroupЃfs shared sales channels
ЃE Increased efficiency through the shared use of sales offices and staff
ЃE Reduced logistics cost with high-volume advantage
Shared compound feed technology and increased production efficiency
ЃE Development and production of the best compound feed for each breeding
ЃE Increased production efficiency of compound feed through sales expansion
ЃE Joint development for improved pig breed

(2) Food manufacturing area
Shared use of manufacturing infrastructure
ЃE Develop the optimal product manufacturing system
ЃE Develop a competitive production system with streamlined and more efficient production processes and an increased operating rate
Increased product sales
ЃE Increased sales through the GroupЃfs shared sales channels
ЃE Increased efficiency through the shared use of sales offices and staff
Promoted joint product development
ЃE Group companies make consolidated efforts to develop distinctive products that meet customer needs.
Outlook
The alliance is not expected to have any impact on ITOCHUЃfs consolidated financial results for the fiscal year ending March 31, 2011.