China: Yamaha and Zhangzidao Group Establish New Company

Yamaha Motor Co., Ltd. has agreed with Zhangzidao Group Co., Ltd., a fishery and marine processing company based in Dalian City, Liaoning Province, P.R. China, to establish a new company to be registered in March 2013 that will manufacture and sell boats designed for fishery and aquaculture work etc.

The new company, “Zhangzidao Yamaha (Dalian) FRP Boat Co., Ltd.”, will establish a 50,000 m2 factory and office facility in Dalian City, Liaoning Province, and will manufacture and sell FRP(Fiber Reinforced Plastic) fishery, aquaculture work, and pleasure boats.

The capital of the new company will be 80 million yuan (approx $12.8 mln). The ratio of capital contribution will be 49% by Yamaha and 51% by the Zhangzi Group.

There are approximately 500,000 motorized fishery and work boats operating in China, and it is estimated that over 80% of these are of wooden construction. They place a high burden in terms of effort and cost on their operators in areas such as maintenance and fuel consumption.

Furthermore, the Chinese Government, which having laid out its plans to reduce energy consumption and CO2 emissions, is promoting the transition from wooden boats and old-style outboard motors to FRP boats and outboards with superior fuel economy, leading to an increase in demand for replacement boats and outboards.

In its new medium-term management plan announced in December 2012, Yamaha declared its intention to conduct a global rollout of its comprehensive marine business, consisting of boats, outboard motors, and water vehicles, aiming to reach an annual turnover of 300 billion yen (approximately 3.5 billion U.S. dollars).

The establishment of this new company is a realization of the new medium-term management plan. Subsequent to the recent Brazilian market business expansion, growth is also expected in the Chinese commercial boat market. Yamaha expects to reach its goals from this Chinese market entry initiative.

[mappress]

Press Release, January 28, 2013