Establishment of Wholesale Food Distribution Business in Vietnam

1. Background of expansion to Vietnam

Katosangyo and Sumitomo Corporation both have long focused on Asian countries, where the retail market has been expanding due to the increase of consumer spending along with the economic growth. The retail industry in this region is undergoing a transformation in its distribution structure, in which traditional business models centering on small-sized local businesses are being replaced by large-scale businesses such as major supermarkets or convenience stores expanded from Japan, Europe and the U.S. to Vietnam, or major food manufacturers locally producing. In such circumstances, it is expected that there will be more needs for wholesale food distribution businesses that systematically supply goods to stores. In this field, the Japanese-style wholesale system is highly advanced in meeting the diverse needs and preferences of individual consumers utilizing its established know-how in conducting and using detailed product and market analysis. Sharing these views, the two companies set up Kato SC Asia Investment Co., Ltd. on October 23, 2012, with the intention of accelerating decision-making, thereby facilitating the overseas expansion, and have prepared for the establishment of a wholesale food distribution company in Vietnam, as its first affiliated business. Vietnamese retail industry is a promising market, with the sales amount of 11.6 trillion yen in 2012 and the growth rate from January to September 2013 reaching 12.5%, as well as a rapid increase in the number of supermarkets, shopping malls and convenience stores. In this growing market, Kato SC Asia Investment Co., Ltd. will expand Japanese-style wholesale distribution business aiming at overseas supermarkets expanded to Vietnam and Vietnamese large-scale retailers.

2. Outline of the established company