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News Release

MATICS Consortium Begins Trials of Service Using IC Tags to Trace
Waste from Asahi Brewery Factories and Medical Waste from Hospitals

March 28, 2005

The MATICS Consortium, an organization hosted by The Japan Research Institute, Limited ("JRI"; Headquarters: Ichiban-cho, Chiyoda-ku, Tokyo; President: Shunichi Okuyama) whose mission is to create waste disposal and processing business using IC tags, recently began validation trials of a system for the tracing of factory waste at the Ibaraki Brewery of Asahi Breweries ("Asahi Breweries"; Headquarters: Kyobashi, Chuo-ku, Tokyo; President: Kouichi Ikeda) and the tracing of medical waste from major hospitals in the Tokyo area.

MATICS currently has 37 member companies and organizations*, which are engaged in the development of tracing services for medical waste and the development and patent development of new business models for recycling services using IC tags .

Owing to heightened awareness of environmental issues in recent years, the environmental risks relating to illegal dumping, improper processing, etc. of industrial waste have come to exert a considerable influence on corporate activities. To prevent disposal risk, i.e. the risk of being held responsible for problems arising from the discharge of waste, a "manifesto" system is already used to record the transfer of waste between the company producing the waste, the waste processing company and the company handling final disposal. However, because manifestos are managed separately from the actual waste, there is pressure for manifestos and waste to be managed in an integrated manner, with a view to reducing disposal risk.

The MATICS Consortium's attention was drawn to IC tags as a means of realizing systems of this kind. IC tags are electronic chips that are expected to bring considerable benefits in distribution and other industries because they allow contactless reading of "information" on individual "items". To date, however, the use of IC tags has been limited to a few single enterprises seeking to improve their efficiency in some sectors of the distribution industry, and as yet their use as a tool for managing logistical flows between different enterprises is not widespread. There are three main reasons for this state of affairs.

The first is that it is difficult to identify clear advantages in switching from barcode systems, which are already used in a wide range of fields, to systems based on IC tags. Switching systems would require that the new systems offer considerable added value. The second is that, when many enterprises are participating in the building of a system with the participation of many enterprises, it is difficult to decide who should bear the cost of introducing the IC tag system. The third is that enterprises providing services that use IC tags are few and far between. Most existing IC tag businesses focus on the sale of IC tag systems. The realization of businesses involving the use of IC tags with the participation of multiple enterprises requires the existence of operators offering integrated services using IC tags.

The MATICS Consortium has been studying new business models for the use of IC tags in waste tracing business to reduce disposal risk and at the same time to minimize the cost burden of tracing on the company producing the waste and the company processing the waste, and working towards their commercialization. The service will involve affixing IC tags to waste discharged from factories and tracing the movement of the waste by scanning the IC tags at every intermediate stage between the factory and the point of intermediate processing. The service will make it possible to review current waste processing methods, thereby helping to reduce the cost of environmental risk countermeasures arising in-house and to reduce the cost of factory waste disposal to an appropriate level. The Consortium is looking to use the characteristics of systems based on IC tags to establish integrated service businesses designed to reduce disposal risk and reduce the cost of waste disposal by optimizing processing methods.

The validation trials in question will involve compressing wrapping waste plastic from Asahi Breweries' Ibaraki Brewery, affixing IC tags to the waste, and verifying the work burden of operating the system and the accuracy of tracing.

With the cooperation of major hospitals in the Tokyo area, the MATICS Consortium is already engaged in validation trials of the application of the system to medical waste and in addition to conducting IC tag reading tests, will be examining the contribution of the system to the reduction of waste processing costs.

The validation trials are being conducted with the aid of members of Consortium, with a view to launching these services on a commercial basis during fiscal 2005.

A total of 37 companies and organizations including Sumitomo Corporation, Nippon Signal, Dai Nippon Printing, Mitsubishi Heavy Industries, Asahi Breweries, Intec Web and Genome Informatics, Envirotec, Satoh, Seino Information Service, Topy, Pasco, Matsushita Electrical Industrial, Mitsubishi Corporation, Mitsubishi Electric, Meidensha, Recycle One, Hitachi, KI, Omron, Canon, Watami Ecology, Daiho, Taiyo Kogyo, McDonald's Japan, Ricoh, JFE Holdings, Tesco, Ichikawa Kankyo Engineering, and Kokuyo. (Alphabetical order, honorifics omitted).

InInquiries relating to this press release:
General Inquiries:
Hideki Kidohshi
Center for the Strategy of Emergence, The Japan Research Institute, Limited

Tel: 03-3288-4649
E-mail:kidohshi@ird.jri.co.jp

Press Inquiries:
Yoshihito Saito
Public Relations Division, The Japan Research Institute, Limited

Tel: 03-3288-5360
E-mail:sato.yoshihito@jri.co.jp

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