An Interview with Yasuo Masumoto, President & CEO

4Kubota Corporationrestructuring and reorganizing the manufacturing base for the Pipes, Valves, and Industrial Castingsbusiness and Environmental Engineering business in Japan. I also participated in the developmentof overseas operations, including the construction of the ductile pipe manufacturing plant in India.I am proud of the fact that my work has consistently been related to manufacturing, and I believethat I am probably somewhat unusual in having been associated with such a wide range of businesses,spanning Internal Combustion Engine and Machinery, Pipes, Valves, and Industrial Castings,and Environmental Engineering. I believe my experience will be applicable and very useful in helpingto appropriately address the major issues that Kubota faces in today’s operating environment.Q4. What do you see as the priority issues that must be addressedfor the time being, and what will your strategies be?We are implementing initiatives to address the issue of “accelerating development of overseasoperations” and “strengthening our capabilities for coping with global economic fluctuations.”Along with the development of our overseas business activities, we will become much moresusceptible to the effects of trends in the world economy and fluctuations in foreign exchangerates. Therefore, creating a business structure that can adapt quickly to changes in the businessenvironment is an urgent issue. To address this issue, we will move ahead first with the expansionof overseas production and optimize the location of production centers on a global scale. We alsowill accelerate the globalization of our procurement activities to make it possible to optimize procurementas well. In addition, to respond flexibly to changes in demand, it will be important to havecommon production methods to make it possible to manufacture the same products with the samemethods at any of our production bases around the world. From this perspective, we will implementinitiatives to develop “Kubota standard” production systems.To reduce variable and fixed costs, we will continue cost-cutting activities relentlessly tostrengthen our ability for withstanding economic fluctuations. In addition, it has become extremelyimportant for us to maintain sound operation of our retail finance business, which has now reacheda substantial scale overseas. At the same time, we will consider procurement of the necessary fundingfor these activities and credit exposure management as well as work to ensure sound financialsupervision.We have focused on expansion in our overseas activities in recent years. Going forward, we willcontinue to give priority in allocating resources to our overseas business activities and work towardtheir further expansion. Thus far, we have concentrated mainly on developing overseas operationsin the Internal Combustion Engine and Machinery area, but, looking ahead, we want to acceleratethe international development of other businesses and thereby reduce the extremely high dependenceon Internal Combustion Engine and Machinery related activities and look for new businessopportunities.