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Effects of Heavy Rain in Western Japan on DISCO's Business Notice

 Production System Almost Completely Recovered (Final Announcement) July 13, 2018, at 17:09 p.m.

July 13, 2018, at 17:09 p.m.

Upon receiving notification that water for production was available for companies in Kure City at around 5:00 p.m. on Thursday, July 12, shuttle transportation of water for production from both the Kuwabata Plant and a neighboring company’s well to the Kure Plant was discontinued.

As of Friday, July 13, the employee attendance rates at the Kuwabata Plant and Kure Plant are 86.4% and 82.4%, respectively. This means the total attendance rate for both plants is now approx. 85%, which is an almost complete recovery to the usual attendance rate of 90%.

As shown above, production has almost completely recovered.
However, there are some employees still suffering from this disaster. Thus, necessary measures will continue to be taken. Moreover, DISCO will continue to provide any support possible to the victims in the peripheral areas.

Additional information will be added to DISCO’s website as necessary.

 Regarding the Delivery Status of Shipments on July 12 and Future Shipment (Tenth Announcement) July 13, 2018, at 11:50 a.m.

July 13, 2018, at 11:50 a.m.
Delivery Status of Precision Processing Tools (Thursday, July 12)
Area Delivery Status
Japan No delays
Overseas Air cargoDelayed up to one day
Courier flight Delayed up to one day

All domestic shipments of precision processing tools on Thursday, July 12 are being delivered with no delays. For overseas shipments, the estimated delay will be up to one day with both air cargo and courier flight. However, for air cargo, usual delivery service is expected to be provided from Tuesday, July 17.

There are no delays for either domestic or overseas deliveries of precision processing equipment.

 Production Status as of July 12 (Ninth Announcement) July 12, 2018, at 15:21 p.m.

July 12, 2018, at 15:21 p.m.

As of Thursday, July 12, the employee attendance rates at Kuwabata Plant and Kure Plant are 87% and 80%, respectively. This means the total attendance rate for both plants is now approx. 84%, which is an almost complete recovery to the usual attendance rate of 90%.

Production status will be updated as necessary on DISCO’s website.

 Regarding Delivery Status (Eighth Announcement) July 12, 2018, at 11:47 a.m.

July 12, 2018, at 11:47 a.m.
Delivery of Precision Processing Tools on Wednesday, July 11.
Area Delivery Status
Japan No delays
Overseas Air cargoDelayed up to one day
Courier flight Delayed up to one day

All domestic shipments of precision processing tools on Wednesday, July 11 are being delivered with no delays. For overseas shipments, the estimated delay will be up to one day.
There are no delays for either domestic or overseas deliveries of precision processing equipment.

Production status will be updated as necessary on DISCO’s website.

 Regarding Delivery Status (Seventh Announcement) July 11, 2018, at 16:50 p.m.

July 11, 2018, at 16:50 p.m.
Delivery of Precision Processing Tools on Tuesday, July 10.
Area Delivery Status
Japan No delays
Overseas Air cargoDelayed up to one day
Courier flight Delayed up to one day

By optimizing the distribution routes and making deliveries with our own company delivery service, all domestic shipments of precision processing tools on Tuesday, July 10 are being delivered with no delays. For overseas shipments, the estimated delay will be up to one day.
There are no delays for either domestic or overseas deliveries of precision processing equipment.

Production status will be updated as necessary on DISCO’s website.

 Regarding Production as of July 11 (Sixth Announcement) July 11, 2018, at 15:33 p.m.

July 11, 2018, at 15:33 p.m.

We would like to provide an update on the production situation today. As of Wednesday, July 11, the employee attendance rates of the Kuwabata Plant and Kure plant are 85% and 76%, respectively. This means the total attendance rate for both plants is now approx. 80%, which is close to the usual attendance rate. The plant occupancy rate is roughly proportional to the attendance rate.
As stated before, we will strive to prevent significant shipping delays by prioritizing production with shorter deadlines.

Production status will be updated as necessary on DISCO’s website.

 Regarding Delivery and Production (Fifth Announcement) July 10, 2018, at 18:04 p.m.

July 10, 2018, at 18:04 p.m.

We would like to provide additional information regarding the effects of the heavy rain in western Japan.

Delivery of precision processing tools on Monday, July 9.
Japan East Japan No delays
Osaka & Shikoku Delayed up to one day
Kyusyu (From Kuwabata) No delays
Kyusyu (From Kure) Delayed up to one day
Western area not included above No delivery on July 9
Overseas Air cargo Delayed up to one day
Courier flight Delayed up to one day

As the restoration of roads around the plants has progressed, the distribution routes for precision processing tools has been continually altered since the second report on July 9. We will continue to deliver equipment to customers using the optimal transportation routes.
There are no delays for either Japan or overseas deliveries of precision processing equipment.

Equipment Production

As stated in the third report on July 9, water for production at the Kure Plant was secured. Therefore, a production system similar to the Kuwabata Plant, for which there was no water outage, was successfully arranged.
Regarding the issue of commuting for employees, the attendance rate was approx. 60% on July 9 and approx. 70% on July 10 for both the Kure and Kuwabata Plant. Although the production volume is roughly proportional to the attendance rate, no significant delay in the shipping schedule is suspected because production with shorter deadlines is prioritized. Although some employees have been affected and are still in evacuation shelters, we believe that the attendance rate will gradually improve to approx. 90% of the usual attendance rate.

Production status will be updated as necessary on DISCO’s website.

 Regarding Material Procurement (Fourth Announcement) July 10, 2018, at 17:31 p.m.

July 10, 2018, at 17:31 p.m.

We would like to provide additional information regarding the effects of the heavy rain in western Japan.

Material Procurement

The suppliers of parts for precision processing equipment sustained no damage. Some precision processing tool suppliers in Hiroshima have suffered due to the disaster, but it has been confirmed that as of July 10, all suppliers have resumed their operations.
However, road closures and traffic disruptions are causing material delivery delays. Though there is an over three-month stock of raw materials for precision processing tools, arrangements for a chartered truck have already been made in case there is an urgent need for necessary materials.

 Regarding Water for Production (Third Announcement) July 9, 2018, at 19:10 p.m.

July 9, 2018, at 19:10 p.m.

We would like to provide additional information regarding the effects of the heavy rain in western Japan.
As stated in the previous announcements, because the prospects for recovery from the water outage look unclear, DISCO was considering chartering water wagons and transporting water from the Kuwabata Plant. However, due to poor road conditions, this would not improve the transportation efficiency, and the issue would not be resolved.

However, as a result of investigating other sources, it was discovered that there is a company located 3.5 km away from the Kure Plant which owns a well for drawing water, and we were able to negotiate the use of water for production. In doing so, the efficiency of water transportation was improved and a sufficient amount of water was ensured for production. Thus, transportation of water to the Kure Plant began at 11:00 am on July 9. As a result, the problem of ensuring sufficient water for production, which was one of the biggest issues, was resolved.

The remaining issue is to secure a means for employees suffering from the disaster to commute to work. Although it is expected that the conditions of roads will improve as time passes thanks to the earnest recovery efforts of the government, by opening the dormitory to employees and their families suffering from the disaster, we can ensure employees have both a place to live and a way to commute to work.

The situation is improving little by little over time, but efforts will be made company-wide to expedite recovery. We appreciate the understanding and cooperation of all the stakeholders.

Production status will be updated as necessary on DISCO’s website.

 Notice of Alternate Logistics Route (Second Announcement) July 9, 2018, at 15:50 p.m.

July 9, 2018, at 15:50 p.m.

This announcement is in regards to the alternate logistics routes from the Kure Plant for precision processing tools. As reported in the first announcement released today, delivery is expected to be delayed a maximum of two days.

Overseas Shipping

The land route to the Kansai International Airport, which is the normal delivery route, cannot be used. Products will be transported by sea and delivered normally afterwards.

Domestic Shipping (Eastern Japan)

DISCO will transport the products to the Hiroshima Airport without using forwarders and deliver them normally afterwards.

Domestic Shipping (Western Japan)
Osaka/Shikoku
DISCO will transport products partially by land and pass them to a forwarder for delivery.
Kyushu
Products will be delivered partially by sea without using the normal land route.
Western Areas of Japan (Except Those Areas Mentioned Above)
As with domestic shipping to eastern Japan, DISCO will transport products to the Hiroshima Airport to be delivered by a forwarder.

Production status will be updated as necessary on DISCO’s website.

 Effects on Production and Expected Delivery Delays (First Announcement) July 9, 2018, at 12:55 p.m.

July 9, 2018, at 12:55 p.m.

From July 5 – 8, 2018, there was heavy rainfall in western areas of Japan, and Kure City in Hiroshima, where DISCO’s plants are located, was also damaged.
We would like to express our sincerest sympathies to the victims and their families.

There was no damage to either DISCO’s Kure Plant or Kuwabata Plant. However, as reported in the news, there has been a water outage in peripheral areas of Hiro in Kure, Hiroshima, where the Kure Plant is located, since July 7. There are some employees suffering from this disaster. Thus, it is expected that production will be affected after Monday, July 9. Due to the closure of roads around both factories and traffic jams in the bypass roads, normal logistic routes cannot be used. Thus, products will be delivered using alternate routes. As a result of this change, the delivery of orders currently received from customers is expected to be delayed a maximum of two days.

Though DISCO has been recycling production water, the water consumed due to evaporation and filter cleaning must be replenished. Production recovery will be achieved as quickly as possible by transporting production water using water wagons and supporting employees that are having trouble getting to the plant. Moreover, until the water supply is normalized, relocation of the precut process for hub blade production (precision processing tools), which requires a large amount of water, from the Kure Plant to the Kuwabata Plant is being considered. This measure will only be implemented after all customers that may be affected have been notified. We appreciate your understanding and cooperation.

Production status will be updated as necessary on DISCO’s website.

 Confirming the Effects on Shipping (Immediate Announcement) July 7, 2018, at 14:50 p.m.

July 7, 2018, at 14:50 p.m.

From July 6, 2018, there was heavy rainfall in western areas of Japan, and Kure City in Hiroshima, where DISCO’s plants are located, was also affected.
Shipping status will be updated as necessary on DISCO’s website.

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