1998 Press Releases-03

Yokogawa Electric Corporation (main office: 9-32, Nakacho 2-chome, Musashino-shi, Tokyo; President: Eiji Mikawa; paid-in capital: 3.2306 billion yen) is pleased to announce an agreement and contract to purchase all of the outstanding stock of Tonen System Plaza Inc. from the Tonen Corporation. The corporate name of Tonen System Plaza Inc. will change to System Plaza Inc. on June 1, 1998.

Factors that Led to the Contract

Tonen Corporation established Tonen System Plaza Inc. in 1985, and the company has engaged in systems operations for the Tonen Group and non-affiliated clients as well since its inception. The percentage of business related to Enterprise Resource Planning (ERP) and Manufacturing Execution System (MES) received from non-affiliated companies has increased in Tonen System Plaza in recent years as the company has built a solid record of advanced technical capabilities and results in those fields.
Yokogawa Electric desires to realize the full potential of its Enterprise Technology Solutions (ETS) concept and plans to upgrade technologies in ERP and MES to support this goal.
These factors led to discussions between Yokogawa Electric and Tonen and produced the contract. The acquisition is advantageous for Yokogawa Electric because the technical capabilities accumulated by System Plaza fit Yokogawa's ETS strategy. Additionally, the buyout is also favorable for Tonen due to greater development of business opportunities for System Plaza in the future because a capital affiliation with Yokogawa Electric is likely to produce better possibilities than continuation under the Tonen umbrella. The acquisition is also deemed a plus for customers and suppliers of System Plaza. Therefore, an agreement was reached to transfer all of the outstanding stock of System Plaza to Yokogawa Electric on July 1, 1998, and a contract was signed on April 28, 1998.

ETS and System Plaza

The ETS business concept of Yokogawa Electric targets the entire range of corporate activities of customers and seeks to provide optimum solutions in terms of cost reduction, quality improvement, and other innovations based on the customers' management perspective. As a result, technical capabilities to build systems at the management level of ERP and control level of MES are essential in addition to systems at the factory (production) level, a strength of Yokogawa Electric. Therefore, Yokogawa Electric has concentrated on enhancing its ETS offering capabilities since 1997 through actions such as acquiring certification as an R/3 implementation partner of SAP Aktiengesellshaft of Germany, a sales tie-up with Aspen Technology of the United States, and a buyout of Marex Technology Limited of Great Britain.
System Plaza has used the Renaissance CS ERP package of Ross Systems, Inc. MIMI supply chain tool of Chesapeake Decision Science,Inc. and other software to develop a unique business based on user perspectives. The addition of System Plaza to the Yokogawa Electric camp will allow Yokogawa Electric to flexibly build systems integrated at the levels of production control and management, and rapid upgrading of MES engineering capabilities and new synergistic effects can also be expected. Flexible responses geared to customer needs in quality control, facility management, scheduling control, and other systems will also become possible. Thus, System Plaza will play a major role in the Yokogawa Group by providing breakthroughs in ETS.

Future Business Operations

The corporate name of Tonen System Plaza Inc. will change to System Plaza Inc. on June 1, 1998, and the transfer of stock will be effected on July 1, 1998. All personnel and operations, including the company's wholly-owned subsidiary of Tonen System Service Inc., will continue business activities in the same manner. The company overview will be as follows on July 1, 1998.

Corporate Name	System Plaza Inc.
Paid-in Capital	200 million yen
Main Store	1-1-39 Hiroo, Shibuya-ku, Tokyo 150-0012
Chief Executive Officer	Hiroshi Madono, President (current president of Tonen System Plaza Inc.)
Employees	260(Approx.)
Sales Forecasts	6.6 Billion yen(FY1998)
	7.0 Billion yen(FY2001)

System Plaza has long relied on its three main business segments of providing the information processing services to the Tonen Corporation, building of business systems that include utilization of ERP packages, and MES for processes. The information processing services for the Tonen Corporation will remain the business base in the future. However, there will be greater emphasis on the ERP and MES businesses, and further expansion of overall operations is envisioned.

Future Policies

The current acquisition helps Yokogawa Electric to strengthen the infrastructure of the ETS system for the entire Yokogawa Group and supports a policy of striving to be a company that provides cutting-edge, optimum solutions.