Notice of Conclusion of MOU for Business Alliance with Samsung C&T Corporation

Dear All

Company Name: erex Co., Ltd.

Representative: Hitoshi Honna

Representative Director and President

(Stock Code: 9517, TSE 1)

Contact: Takanobu Yasunaga

Executive Director

(TEL: +81-3-3542-4336)

Notice of Conclusion of MOU for Business Alliance with Samsung C&T Corporation
– Expansion of Fuel Business –

erex Co., Ltd. (Head Office: Kyobashi, Chuo-Ward, Tokyo; Representative Director and President: Hitoshi Honna; hereinafter “erex”) is pleased to announce that it has concluded a memorandum of understanding (MOU) with Samsung C&T Corporation (Head Office: Seoul, South Korea; President & CEO: Jung Suk Koh; hereinafter “Samsung”) to start discussions on a business alliance to supply biomass fuels to inefficient coal-fired thermal power generation in Japan and overseas and for other businesses as follows .

Note

1. The Background of the Business Alliance

With its mission “Creating the future with new ideas and energy” and its 2030 vision “becoming a pioneer in the new era of electric power with renewable energy at its core”, erex aims to realize de-carbonized societies in Japan and overseas through renewable-energy-based businesses while pursuing economic rationality. erex approaches the reduction of energy costs from various perspectives, making full use of its accumulated know-how in biomass power generation business, fuel business, and others.

In recent years, there has been a growing interest in introducing a new and more effective mechanism to fade out inefficient coal-fired thermal power plants and to make renewable energy the main source of power, as specified in the Basic Energy Plan, in order to achieve a de-carbonized society while ensuring a reliable energy supply in Japan, which is a resource-poor country. By using biomass fuels for inefficient coal-fired thermal power plants that will be forced to fade out by 2030, erex will contribute to the stable supply of energy in Japan by reducing CO2 emissions and increasing efficiency. erex plans to establish a system that can provide 3 to 5 million tons of biomass fuels per year by 2025 and 10 million tons per year by 2030.

On the other hand, Samsung supplies biomass fuels to biomass power plants and thermal power plants in South Korea, and has a proven track record and extensive knowledge.

Under such circumstances, in order to procure stable and cost-competitive biomass fuels, erex has decided to conclude an MOU with Samsung, which develops and deploys biomass fuels globally, to conduct joint businesses. In response to the social demand for de-carbonization, the two companies, which have excellent technologies and sales capabilities as renewable energy business entities such as biomass fuels and biomass power generation businesses, will conduct joint businesses to maximize their respective strengths and to aggressively expand their efforts to expand the introduction of renewable energy.

2. The Purpose of the Business Alliance

Through the conclusion of this MOU, the two companies will discuss, with mutual consent, biomass fuel supply businesses for inefficient coal-fired thermal power plants, fuel supply for large-scale biomass power plants, and consideration of other new projects in the renewable energy business field by making more optimal and effective use of the business areas in which they excel.

erex will continue to expand CO2-free power sources such as renewable energy, to expand biomass power generation businesses by co-firing of biomass fuels for inefficient coal-fired thermal power generation and single-firing, and to develop initiatives from biomass fuel businesses to power generation businesses overseas, including Vietnam, in order to contribute to CO2 emission reduction and to contribute to de-carbonization of energy by challenging new business fields with originality and ingenuity.

3. The Company Profile of Samsung and erex

4. The Impact on the Business Performance

The impact of the conclusion of this MOU on the business alliance on the business performance of erex for the current fiscal year is expected to be minimal. erex will make a public announcement when the specific policies of the alliance are determined in the future.