TAKARA HOLDINGS INC.

(1) First Medium-Term Business Plan for Takara Shuzo Co., Ltd.

The three-year period covered by the present medium-term business plan will be an especially important time for our efforts to build a stable income base for the future through the following strategies.

<1> Alcoholic Beverages, Seasonings and Beverages

We will establish a group structure based on product categories, including the establishment of product headquarters responsible for the entire life cycle of each product. We will strengthen our competitiveness in the markets for alcoholic beverages,
seasonings and beverages by restructuring our supply chains and management organizations, starting from the R&D stage, in order to optimize procurement, production and distribution.

• ・Shochu
  Our short-term strategy calls for market share expansion through the revitalization of our existing brands (Takara Shochu Jun, Honkaku Shochu Yokaichi). Our longer-term goal is to establish the Shochu Zipang brand and a high-added-value connoisseur shochu brand.
• ・Light-Alcohol Refreshers
  We will focus on the development of Takara Can Chu-Hi as a dominant brand in the low-price chu-hi market, with particular emphasis on Nama Kajyu Chu-Hi.
• ・Sake
  Our short-term goal is to expand our share of the sake market by developing Sho Chiku Bai, Komekome Karakuchi as a leading brand. In the longer-term, we will strengthen the Sho Chiku Bai brand by developing high-quality sake products from our Shirakabegura brewery at the Nada Plant.
• ・Seasonings
  We will maintain profit levels by further enhancing our advantage as the leading mirin brand. Having established a position in the cooking sake market, we will advance to the sales expansion stage.
• ・Beverages
  Our strategy calls for a shift to high-added value products, such as Takara Barbican non-alcoholic beer, and health drinks.

<2> Overseas Activities

In addition to our efforts to strengthen existing overseas business operations, we will also carry out test marketing of light-alcohol refreshers, especially in the China market. Another focus will be the development of markets for our premix seasoning products.

<3> Raw Alcohol

In preparation for the total liberalization of alcohol sales in 2006, we will focus on the development of new users, including the industrial alcohol market.

<4> Third Operational Reform Program - Targeting Cost Reductions

As part of the current medium-term business plan, we will implement our Third Operational Reform Program. The aim of this program is to secure resources for business development and improve earning power by restructuring production operations, reviewing product specifications, reducing the cost of raw materials, containers and packaging, and cutting labor costs. We will achieve total cost savings of \5,200 million by fiscal 2005 compared to fiscal 2002 levels.

<5> Management Restructuring

We will establish a group structure based on product categories, including the establishment of product headquarters responsible for the entire life cycle of each product. We will strengthen our competitiveness in the markets for alcoholic beverages,
seasonings and beverages by restructuring our supply chains and management organizations, starting from the R&D stage, in order to optimize procurement, production and distribution.

(2) Performance Targets for TAKARA SHUZO CO., LTD

	2002	2003	2004
Net Sales	166,200	166,600	170,300
Operating Income	8,200	8,400	8,600
(millions of yen)

(1) First Medium-Term Business Plan for TAKARA BIO INC.

The plan focuses on the three priority areas of biotechnology research, biomedicine and agribio. The aim is to achieve accelerated growth and development by concentrating all resources in these areas.

<1> Bio Research: DNAtech

We plan to expand our bio research support business. The Takara Advanced Biomedical Center has developed a number of unique technologies, including the ICAN TM , UCAN TM and CspA methods, DNA chips, and DNA microbeads. Other assets in this field include the large-scale sequencing capacity of Dragon Genomics, Co., Ltd., the manufacturing capacity of Takara Biotechnology (Dalian) Co., Ltd., the production and sales capabilities of Takara Korea Biomedical Inc. We are actively applying these assets to the development of our business activities, including:

• ・Industrial scale production of DNA fragments using the ICANTM method(Isothermal and Chimeric Primer-Initiated Amplification of Nucleic Acids), with a view to a role as an international DNA manufacturer.
• ・Contract production and related businesses of proteins using the cold shock vector (CspA) method, which allows efficient expression of target proteins.
• ・Development and sales of research reagents and diagnostic drugs based on the ICAN TM method and the new UCANTM method for SNP (single nucleotide poly-morphism) typing.
• ・Genetic exploration, genetic function analysis and contracting services based on DNA chips and DNA microbead technology.
• ・A genome data business based on the results of an analysis project by Dragon Genomics, Co., Ltd.
• ・Marketing of bio-research reagents and contract research services in Asia, especially South Korea, China and Taiwan.

<2> Biomedicine

We are developing business activities to commercialize gene therapy and cell therapy. One key area of business is based on the RetroNectin R method, a highly efficient gene transduction technology for which Takara Bio holds a patent. Another focus is the development of business activities by ViroMed Co., Ltd., a South Korean venture business in the gene therapy field. We are also actively commercializing advances in the cell therapy field. For example, we are the first company in Japan to sell a hematopoietic stem cell isolation system, which plays a central role in this field. Our principal business activities are as follows.

• ・Global expansion of a gene therapy business based on the RetroNectinR method, in partnership with the Italian company MolMed.
• ・Contract production and safety testing of naked DNA and virus vectors for clinical gene therapy research at the Center for Cell and Gene Therapy (CCGT).
• ・Clinical testing of gene therapies by ViroMed (including ischaemic disease in the peripheral blood vessels, rheumatoid arthritis, Hunter syndrome, chronic granu-lomatosis, Hurler syndrome).

<3> Agribio

We developed business activities based on biomedical foodstuffs, such as fucoidan and agarooligo saccharides, whose scientific foundations were elucidatd by our original technology. We are also involved in organic cultivation of Ashitaba and other vegetables at Saigo Village in Fukushima Prefecture and on Yakushima Island in Kagoshima Prefecture. In cooperation with Takara Agri Co., Ltd., which has specialized in the mushroom business for many years, we are also developing business activities that focus on healthy living and the promotion of good health.Our main activities are as follows.

• ・Organic vegetable growing in partnership with Pulmuone Co., Ltd. of South Korea.
• ・Construction of organic vegetable processing plants and supply of organic vegetable products.
• ・Development of the Ashita-Bar antenna shops for agribio products as a franchise business.
• ・Establishment of Mizuho Norin K.K. and construction of an advanced production plant for hatakeshimeji (Lyophyllum decastes, gourmet mushrooms).
• ・Establishment of a production joint venture in South Korea with Pulmuone Co., Ltd.

(2) Performance Targets for TAKARA SHUZO CO., LTD

	2002	2003	2004
Net Sales	14,900	16,900	21,100
Operating Income	700	700	1,900
(millions of yen)