Yokogawa Electric Corporation BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Yokogawa IA Update November 24, 2004 Nobuaki Konishi Industry Automation System Marketing

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.2 Contents Yokogawa No.1 Strategy Yokogawa is growing Yokogawa is expanding “Vigilance” review and progress

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.3 Becoming the top supplier Yokogawa No.1 Strategy

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.4 Becoming the top supplier Minaki-san declared on August 24, 2004 as follows; Now is the time for Yokogawa to seize a “golden”, and possibly the last, opportunity to become the leading company in the PA (Process Automation) business. The IA Business Headquarters will focus resources on its mainstay PA business and enhance R&D, with the aim of becoming the leading company by securing the largest market share for core PA products by Uchida-san

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.5 Becoming the top supplier We must be the No. 1 Process Automation supplier by 2010 Uchida-san Minaki-san declared on August 24, 2004 as follows; Approved by

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.6 Applicable Product Segments for Top Market Share by 2010 ・ Process control systems6 th  No. 1 ・ Key sensors Differential pressure transmitters 2nd  No. 1 Process analyzers* 4th  No. 1 Magnetic flowmeters 4th  No. 1 Vortex flowmeters No. 1  No. 1 ・ Industrial recordersNo. 1  No result 2010 target *Water analyzers (pH and turbidity ）, oxygen analyzers, infrared gas analyzers, and process gas chromatography Securing leading shares for large-market segments and, in particular, becoming the top supplier of products for which Yokogawa already holds a competitive share.

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.7 No. 1 Strategies Concentrating on core-value products –Further enhancing competitive products and Systems –Concentrate on the selected No. 1 products –Expanding the product portfolio Winning the full digital plant information revolution –Creating a paradigm shift in the industry by enhancing Fieldbus solutions Switching from defense to offense –From just imitating competitors to proactively launching a variety of marketing campaigns using the new concept

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.8 Yokogawa System business should be No.1

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.9 Growing evidence Yokogawa is growing

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.10 PA Business Revenue outside Japan M$ PA System PA Products CAGR = 12.1 ％ 12.3%

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.11 PA Business Revenue outside Japan M$ PA System PA Products 21.6 ％ 14.5%CAGR =

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.12 Recent DCS Global Sales Result 8.0% 8.1%8.8% 9.3% Global Share (11.2%)* *) Konishi’s expectation

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.13 Expanding strategies Yokogawa is expanding

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.14 Singapore Development Center USDC : United States Development Center SGDC YHQ R&D USDC Middle East India China ASEAN 30 years’ successful operation Center of Asian market Rich IT engineering resources Rich multilingual resources SGDC to be established as a software development center of excellence which focuses on user-oriented MES packages SGDC : Singapore Development Center

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.15 YHQ is in charge of - Fundamental software - Controller - Hardware SGDC is in charge of - MES layer software - Advanced Control software - Solution-based software USDC is in charge of - De Facto Standard Interface MES ERP Control systems Field equipment ERP: Enterprise Resource Planning MES: Manufacturing Execution System ISA-95 ISA-88 MES Development with Users User USDC : United States Development Center ISA-99

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.16 New Houston Office Houston Expansion and strengthen Sales development Marketing capability Project execution excellence Atlanta/Newnan Short History of Houston Ofiice Opened in 1983 as a branch office Moved Control system headquarters from Georgia in 2002 Constructing New office and move in 2005 Why Houston? Houston is the center of global Oil and Gus IA business

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.17 Yokogawa Romania: YEF Engineering Center DCS & Safety engineering for Oil & Gas up- & Downstream, Petro- chemicals, Chemicals and Power SCADA & Stardom solutions

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.18 Global Safety Solutions Center (GSSC) Yokogawa global approach to safety –Headquarter Japan –System Center Europe –System Center Asia GSSC provides a global approach to safety FSM of System Centers are certified to –IEC –IEC 61511

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.19 Global Safety Solutions Center GSSC = Yokogawa’s commitment to safety GSSC Client Research & Survey Solution Design Project Execution Lifetime Services Product & Marketing Safety Consultancy Tech. Support Safety Assurance

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.20 Vigilance campaign progress and the next step Vigilance review

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.21 Vigilance Campaign Evolution Roadmap Search for our heart & soul Articulate our values Align our actions In House Rollout Mar/2003 ISA Show Oct/2003 Vigilance in mindset and behavior Vigilance in products and services What does Yokogawa stand for? FFCS AXFEJX Yokogawa’s Commitment

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.22 Vigilance is Commitment It’s our mindset. –Being alert to protect customer interests. It’s our behavior. –Going the extra mile to do things right. It’s our commitment. –Committed to building the future to last. foresight innovation quality

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.23 ARC Forum Feb/2005 Vigilance Campaign Evolution Roadmap Search for our heart & soul Articulate our values Align our actions In House Rollout Mar/2003 ISA Show Oct/2003 Vigilance in mindset and behavior Vigilance in products and services What does Yokogawa stand for? FFCS AXFEJX Yokogawa’s Commitment Today Customer’s Future XXXXXXXXX New Product XXXXXXX realization with products and services

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.24 A well-managed plant looks silent and boring - Peter F. Drucker IA Direction Win the No.1 share by offering the unified IA vision “vigilantplant”, an ideal plant for customers What is an ideal plant like?

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.25 What is an Ideal Plant by Yokogawa Like? A silent and safe plant that enables to: SEE CLEARLY Less blind spots Avoid guesswork, instability, sub-optimization KNOW IN ADVANCE Fewer surprises Minimize reactive measures, unexpected downtime, quality variations ACT WITH AGILITY Free of bottlenecks Reduce delays, lost opportunities, knowledge silos

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.26 ARC Forum Feb/2005 Vigilance Campaign Evolution Roadmap Search for our heart & soul Articulate our values Align our actions In House Rollout Mar/2003 ISA Show Oct/2003 Vigilance in mindset and behavior Vigilance in products and services What does Yokogawa stand for? FFCS AXFEJX Yokogawa’s Commitment Today Customer’s Future Attention: New safety system is confidential until its publication early next year VigilantPlant realization with products and services

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.27 The Objective of this Workshop Understand the idea of “XXXXXXXXX” Understand the new product Think how to utilize these to your business Customer’s Future XXXXXXXXX New Product

BMD-C0017 Copyright © Yokogawa Electric Corporation October 2004 Vigilance Workshop 3 Page.28 Thank you for your attention. Commitment means building the future to last.