News Release

Strengthening the Vending Machine Business in China

July 28,2016
Fuji Electric Co., Ltd.

　Tokyo, July 28, 2016 - Fuji Electric Co., Ltd. (TSE:6504) ("FE"), headquartered in Tokyo, Japan, led by President Michihiro Kitazawa, is pleased to announce its intention to strengthen the vending machine business in China by bolstering on-site production capacity and further enhancing its development as well as sales and service frameworks.

1．Background and Objectives

Demand for vending machines is skyrocketing in China, due primarily to the country’s expanding beverage market and rising wages. Fuji Electric delivered about 40,000 vending machines to the Chinese market in FY2015; this number is predicted to rise to 170,000 in FY2018 and 340,000 in FY2020.

In 2003, Fuji Electric launched its vending machine business in China by setting up a joint venture called Dalian Fuji Bingshan Vending Machine Co., Ltd. (DFB) with Dalian Refrigeration Co., Ltd.
The move was designed to allow Fuji Electric to break into new vending machine markets outside of Japan.

The market subsequently began to expand with the entry of local beverage manufacturers and others into the vending machine business, and in April 2015 Fuji Electric responded by setting up a new company, Dalian Fuji Bingshan Vending Machine Sales Co., Ltd. (DFBS), to take charge of vending machine sales and service. In February 2016, Fuji Electric invested additional capital to expand DFB’s production capacity, setting up a system capable of producing 50,000 machines annually.

Fuji Electric set for further expansion of the vending machine business in China as for FY2018 Medium-Term Management Plan and the company is now looking to take the following actions.

2．Concrete Actions (FY2016–FY2018)

1) Double Production Capacity

DFB will build a second vending machine plant and set up a system capable of producing 100,000 machines annually. Construction on the new plant will start in July 2016, with capital investment flowing in stages based on production volume, with a total investment of around JPY 5.0 billion. Fuji Electric will ensuring efficient manufacturing operations at DFB by transferring a complete line of production technologies—from sheet metal working to coating and assembly—from its domestic mother factory in Mie as well as outfitting the plant’s welding and assembly processes with the latest automated equipment.

2) Strengthen Development Frameworks

DFB will more than triple its development staff to some one hundred employees, aiming to quickly respond to local market needs by enhancing its development framework as well as setting up its machines to handle China’s growing e-money economy, incorporate digital signage, and more.

3) Enhance Sales and Service Frameworks

DFBS will triple its current number of sales and service outlets to around one hundred, not only establishing them in major cities but also rolling out a broad sales and service network extending from coastal areas to the country’s interior. The goal is to market the company’s products as well as offer extensive after-sales services to beverage manufacturers and operators scattered throughout China.

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