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CEO Message

Renewed on May 14, 2010

President and CEO:
Satoshi Ishizaki

I would firstly like to extend my best wishes to all shareholders and investors.

As regards the consolidated results for the fiscal year ended March 2010, while net sales declined 18.6% year-on-year to 211,800 million yen and similarly operating income also declined 17.4% to 7,400 million yen, net income grew 31.4% to 4,500 million yen, due largely to accounting for an extraordinary loss related to the Anti-Monopoly Act in the previous fiscal year. Although at the beginning of the year cargo movement remained sluggish, due to the ongoing influence of the worldwide economic recession that commenced two years ago, in the second half of the year a recovery trend was noted in many areas. However the notable increase in transport costs and a profit squeeze, particularly evident in Japan, resulted in an operating income below that forecast.

Against this background and in line with our Company’s long term vision of becoming a truly global corporation able to compete on an equal footing with the existing major international freight forwarding and logistics companies, this fiscal year KWE established its new medium-term 3 year management plan “Ready for the Next!”. This plan will run for the period from the fiscal year ending March 2011 through the fiscal year ending March 2013. Under this plan that sets forth consecutively increasing annual numerical targets, KWE aims to achieve net sales of 300,000 million yen (An approximately 40% increase on results for fiscal year ended March 2010) and operating income of 15,000 million yen (also an approximately 100% increase) by the final fiscal year ending March 2013 through a strong focus on the following four management strategies.

1. Create a Strong Asia (focused investment of management resources)
   Improve the functions of our Asian distribution bases and further strengthen our network through focused investment of management resources in Asia and particularly in China where further future growth is expected.
2. Sell a Strong Asia (create a sales structure to compete with global competitors)
   Create a structure for the Group as a whole to sell a “Strong Asia” in the global market with the goal of expanding our air and ocean freight volume between Asia and Japan, Asia and the Americas, and Asia and Europe, as well as within Asia.
3. Strengthen core competencies (human resources, quality, IT)
   Position human resources, quality, and IT as our core competencies while at the same time pursuing overall management strategies. Work continuously to improve them to establish a competitive edge.
4. Ensure thorough compliance and strengthen a management system for the environment
   Continue compliance awareness education and training throughout the Group and strengthen our environment management systems. Under this plan in the first year ending March 2011, KWE year-on-year forecasts are a 10.9% increase in net sales to 235,000 million yen, a 34.2% increase in operating income to 10,000 million yen, and a 26.9% increase in net income to 5,800 million yen.

Through ongoing implementation of “Ready for the Next!” the new medium-term management plan described above under which Asia will be the stepping stone for further global expansion, KWE through constructing a balanced management system is committed to improving its competitiveness in the global market. I would therefore like to take this opportunity to request the continued future support of all our shareholders and investors.