Konica Minolta Holdings, Inc.
August 28, 2003

Konica Minolta Group: Basic Guidelines for Business Strategies

Tokyo (August 28, 2003) - On August 5, 2003, Konica Corporation and Minolta Co., Ltd. integrated management to form a new integrated holding company, "Konica Minolta Holdings, Inc." (President & CEO: Fumio Iwai) to newly start Konica Minolta group. The new company manages the group as a holding company, pursues portfolio management, and promotes managerial transparency to maximize corporate value.

A management philosophy of Konica Minolta group is "The Creation of New Value" and our visions are "Innovative corporation that continues to create impressions in the field of imaging" and "A global market leader that offers advanced technology and reliability." In addition, we set forth "The essentials of imaging" as our corporate message. This is to describe that we provide essential products and services to our customers in the imaging field and to be the essential company.

To accomplish the above philosophy and visions, we set forth four principles:

  1. Obtaining a dominant position in the areas where the company can demonstrates its strength.
  2. Achieving sustainable development as well as establishing a solid financial position.
  3. Creating an open and fair environment with a global vision.
  4. Developing the world’s most advanced technology and strengthening the ability to produce revolutionary ideas.

In addition, we aims to become a group of personnel, who becomes a market leader in the field of imaging, who is not obsessed with the past success and customs, who sees from the viewpoint of customers, and who increases his/her value, while constantly seeking changes.

On October 1, 2003, we will become a new group of companies by reorganizing businesses to maximize integration effects and synergy, thus forming six business companies and two common function companies under the new holding company.

The basic business guidelines of the new Konica Minolta Group:

  1. Precisely carrying out portfolio management

    1) Allocating management resources adequately having "BusinessTechnologies" as core business, "Optics" as strategic business, and "Photo Imaging and Camera" as transforming business.

    2) Promoting ideal business structure such as to disperse risks of operational fluctuations of business units and to pursue group-wide sustainable growth.

  2. Pursuing an ideal group-wide corporate governance

    Clearly separating audit and execution of the top management to execute highly transparent management.

  3. Penetrating the Konica Minolta brand in the field of imaging

    1) Providing innovative products developed by top-notch technologies that meet the needs of customers.

    2) Introducing new products from time to time under the Konica Minolta brand. The initial such product to be introduced in September 2003 will be the full-color 50 sheets/min MFP (multi-function peripheral).

  4. Promoting primary R&D strategy of the Group

    1) Assembling researchers and engineers to reinforce knowledge management and to increase synergy effects in integration of technologies, and establishing "Imaging Culture Research Institute" to take the lead in life and business styles in the field of imaging, thus creating innovative products and new businesses.

    2) Fusing and expanding core technologies, such as optics, nano-, image processing and material technologies, to create unique materials and key devices to support development of innovative products.

  5. Adopting a performance-oriented human resources policy

    Promoting allocation of suitable human resources to the adequate posts on the basis of the performance-oriented policy.

  6. Emphasizing corporate social responsibilities

    1) Placing emphasis on the global environmental issues.

    2) Sustaining corporate ethics at high-level.

    3) Pursuing corporate activities with the utmost transparency.

    4) Increasing corporate value, and contributing to shareholders by maintaining stock price at high-level and providing firm dividend.

Business Strategies

"Business Technologies" (BT) business

[Mission]

As a core business of the Konica Minolta Group, the Company will expand business and generate profit as well as cash flow.

[Primary Strategies]

  1. BT will focus on the color and high-speed digital products, placing MFPs and LBPs as core products of its business. In particular, BT will pursue a leading position in the target market by consistent marketing, which consists of development, production and sales forces.
  2. Introducing value-added products and services through reinforcing networking solution businesses.
  3. Promoting profitable consumable business placing the polymerization toner as its core product.
  4. Expanding business by reinforcing OEM businesses such as sales of polymerization toner and color MFPs and LBPs.
  5. Promoting strategic alliances to strengthen competitiveness.

"Optics" (OT) business

[Mission]

As a strategic business of the Konica Minolta Group, OT is promising to become the world’s strongest optical device manufacturer.

[Primary Strategies]

  1. Emphasizing optical disk pickup lens, lens units, micro-lens, micro-camera units, and electronic materials businesses to enhance optics businesses and increase profitability.
  2. Maintaining profitability of the optical disk pickup lens business by the advanced technologies and patent strategies.
  3. Expanding and boosting profitability of the lens units business.
  4. Promoting prompt start-up of the micro-lens and micro-camera unit businesses.
  5. Promoting the electronic materials business by trinity of films - TAC, CAP and AR - in the expanding large format LCD market.

"Photo Imaging" (PI) and "Camera" (CA) businesses

Pursuing business structure capable of exerting synergy effects of PI and CA to provide an integrated system from input to output.

PI

[Mission]

Restructuring a silver-halide business and transforming to a new business to secure profits.

[Primary strategies]

  1. By adoption of regional strategy in the silver-halide business, further promoting sales for the growing markets and continuing drastic restructuring for the matured markets.
  2. Developing particular businesses on the basis of value-chain concept to secure sales and profits.

CA

[Mission]

Pursuing business expansion by digital still cameras (DSC).

[Primary Strategies]

  1. Assuming No.1 position in the four DSC categories (slim and compact DSC, high resolution compact DSC, affordable high-powered zoom lens DSC, and advanced function DSC with built-in lens) where CA can demonstrate strength.
  2. Improving profitability and expanding business by taking advantages of the competitive European sales network and captive production sites in China.

"Medical and Graphic" (MG) business

[Mission]

As a stable business, securing profits through aggressive expansion of dry and digital products, while transforming its business structure to a profitable service-oriented one.

[Primary Strategies]

Medical Imaging

  1. Increasing the X-ray film market share through promotion of dry laser imager and CR.
  2. Expanding overseas operations aggressively especially in the US, Europe China and Russia.
  3. Creating new businesses and streamlining the current business structure in the world of decreasing conventional film market.

Graphic Imaging

  1. Boosting the film share in the overseas markets such as China, other Asian countries, and Middle East.
  2. Securing profits through increased direct sales in Japan.

"Industrial Instruments" (SE) business

[Mission]

Concentrating resources on the non-contact 3D measuring instruments business to secure stable profits.

[Primary Strategies]

  1. Expanding the product lineup of non-contact 3D digitizers to boost sales volume.
  2. Strengthening the ability to provide solutions by fusing in-house and outside software technologies.

Cautionary Statement Regarding Forward-Looking Statements:

This press release includes forward-looking statements that reflect the plans and expectations of Konica Minolta Holdings, Inc. To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. The forward-looking statements are based on the current assumptions and beliefs of Konica Minolta Holdings, Inc. in light of the information available to it, and involve known and unknown risks and uncertainties. Potential risks and uncertainties include, but are not limited to, the ability of Konica Minolta Holdings, Inc. to integrate the operations of Konica Corporation and Minolta Co., Ltd. effectively, as well as the factors identified under "Forward-Looking Statements" of the Annual Report 2002 of Konica Corporation and "Disclaimer Regarding Forward-Looking Statements" of the Annual Report 2002 of Minolta Co., Ltd. Such risks, uncertainties and other factors may cause the actual results, performance or financial position of Konica Minolta Holdings, Inc. to differ materially from those expressed or implied in the forward-looking statements. Konica Minolta Holdings, Inc. undertakes no obligation to update publicly any forward-looking statements after the date of this press release.

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