NTN Corporation (NTN) and China's Luoyang LYC Bearing Co., Ltd. (Luoyang LYC) have signed a memorandum that confirms the intention to begin study of an alliance between the two companies related to the bearing business, which the establishment of a joint venture to manufacture and sell automotive bearings in China.

1. Purpose of establishing a joint venture

As one of the issues emphasized in a new medium-term management plan “NTN 2010 for The Next Step”, NTN is accelerating the enhancement of sales and production system in emerging nations. NTN has been expanding a business of various automotive products in which NTN has high technologies and market share, including the top market share in the world for hub bearings, as well as industrial machinery products for the Chinese market where demand is rapidly increasing.

Luoyang LYC is a top-of-the-line Chinese bearing manufacturer. It boasts a wide sales and procurement network in China, and it aims at further development of sales in the automotive market.

By establishing a joint venture that will manufacture and sell 2nd and 3rd generation hubs and needle roller bearings in China, NTN and Luoyang LYC will achieve a high level of both quality and cost competitiveness, and will work toward increasing sales to automotive manufacturers both inside and outside of China. NTN and Luoyang LYC will also examine the possibility of an alliance that mutually utilizes the sales networks of both companies toward expanding sales of automotive and industrial machinery products in China.

2. Future plans
A joint-venture agreement is scheduled to be concluded by the end of July of 2010 followed by establishment of the joint venture and a technical license agreement to be entered into by the end of August. Mass production by the joint venture is expected to begin by the end of October of 2011. The total investment in that company is planned at about one billion yuan (about 13 billion yen).

Including those alliance-related sales, NTN aims at 100 billion yen sales in China within 5 years, by fiscal year 2015.

3. Outline of the alliance partner
(1)Company name Luoyang LYC Bearing Co., Ltd.
(2)Line of business Manufacture and sales of various bearings
(3)Location No. 96, Jianshe Road, Luoyang City, Henan Province, China
(4)Establishment 1954
(5)Registered capital 1.13 billion yuan (about 14.7 billion yen)
(6)Annual sales 2.7 billion yuan (about 35.1 billion yen)
(7)Employees Approx. 9,900

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