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News Release

Launch of Bio-gas Supply Business Supply to Bikkuri Donkey Hokkaido Factory starts; Japan's first recyclable energy supply project in the gas business; small-scale distributed local production/local consumption system

October 12, 2007

Kanematsu Corporation
DAI-DAN Co., Ltd.
The Japan Research Institute, Limited

Kanematsu Corporation (Headquarters: Minato-ku, Tokyo; President: Yoshihiro Miwa), Aleph-inc. (Headquarters: Shiroishi-ku, Sapporo; President: Akio Shoji), DAI-DAN Co., Ltd. (Headquarters: Nishi-ku, Osaka; President: Toshikazu Andoh), and The Japan Research Institute, Limited (Headquarters: Chiyoda-ku, Tokyo; President: Yasuyuki Kimoto) have launched a project in which the surplus bio-gas generated by a bio-gas fermentation plant for the processing of livestock excreta on a dairy farm in the municipality of Chitose in Hokkaido is refined using low-cost, high-efficiency refining equipment and bottled in high-pressure cylinders for delivery as fuel gas. The partners began supplying a food product factory belonging to Aleph-inc. (the Bikkuri Donkey Hokkaido Factory) located in Eniwa, in September.

The project is Japan's first recyclable energy supply venture in the gas business. The tie-up between a local dairy farm and a local food product factory also allows the creation of recyclable energy from biomass, a resource that is widely available in small quantities and until now has not been exploited, and constitutes a local production/local consumption model for recyclable energy to be consumed in the local area.

As it is likely that livestock excreta will not be the only source of bio-gas and that the technology will be applied to sewage sludge and food waste, etc., the 4 companies are planning to use this project as a stepping stone to the expansion of their small-scale distributed bio-gas supply business. The total value of the market if all available organic waste in Japan were converted to bio-gas and supplied as gas fuel is estimated to be approximately ¥230 billion.

This project was implemented with the aid of a Ministry of the Environment grant under the "Fiscal 2006 Global Warming Countermeasures Business Model Incubator Projects". Its contribution to the reduction of CO2 emissions is estimated at 82 tons per year.

For more information on the content of this report, please contact Tsuyoshi Annou, the Japan Research Institute, Limited.

Tel: 03-3288- 4985

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