"For our future. Re-challenge 2010"

On October 1, the first day of the 2nd semester of 2008, at 8 clock in the morning, I introduced Kyokuyo's action plan for 2009-2010 under new slogan "For our future. Re-challenge 2010" to all the employees and subcontractors. And on October 15, the company appointed Mr. Shusaku Yamada, ex-corporate officer, as a member of the board of directors and head of the newly created Corporate Strategy Office.

Shusaku has held positions in various fields during his career of 28 years with us, including marketing and manufacturing, and has proven his passion and ability to motivate an organization. Being full of personal magnetism, he is widely respected by blue-collar workers, too. I am sure that Shusaku will make a significant contribution to the company's "re-challenge" by implementing the action plan in his original way.

The world has changed since only one month : dry cargo freight rate has fallen to 10% of the peak time of 6 months ago ; nationalization of and/or public fund injection to banking establishments everywhere on the globe ; stock market nosedive and currency exchange roller-coaster - everybody looks in self-doubt and scared of economic crash. While we hope - frankly and sincerely - things will get more stabilized as soon as possible, we will exert our best effort to keep the company advancing, challenging, and growing.

November 1, 2008
Katsuhiko Ochi
President

On being appointed as director

Hello, everybody. I am Shusaku Yamada. I will work hard to fulfill my duties in order to push Kyokuyo to top company among the middle-sized Japanese shipyard in terms of technical capabilities, financial status and human resource.

My first mission is to build a solid base for the company to become a prominent and long-lived shipbuilder. While shipping market has been in boom and many of our competitors have been desperately trying to enhance building capability, Kyokuyo's investment has gone to cost-saving technology and equipment-life prolongation. It will be an exciting challenge to prove our strength in the stalled market.

Secondly, as the person in charge of purchasing, I would like to stress the importance of redefining and refining the material buying strategy. Now that upward pressures due to financial speculation and overheated demand were gone, material prices look dropping back to the previous level. It is crucial to get the correct timing and price to buy for ensuring company's profitability.

In addition to the above, my missions include, obviously, to implement "For our future. Re-challenge 2010" plans in coming year, as the head of Corporate Strategy Office.

To be frank with you, I am having a mixed feeling of excitement and anxiousness. You may know and I know very well that I am only a simplistic, short-tempered and indiscreet man. I sincerely hope that you will continue to give me your kind support so that I can accomplish my ultimate goal that is to leave a unique, competitive and sturdy shipbuilding company to younger generations.

November 01, 2008
Shusaku Yamada
Director
General Manager of Material Purchasing Division
Head of Corporate Strategy Office