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Mitsui to Acquire 14% Shares in Synlait Limited

Jun. 6, 2007


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Mitsui & Co.,Ltd("Mitsui")and Synalait Limited("Synalait" headquartered in New Zealand) have announced they will be working together to take Synlait's whole milk powder products to the world market.

Mitsui will invest NZ$13.5m in Synlait for a 14% share of the company and will provide a further NZ$16.5m of loan.

Synlait is an unlisted public company established in 2000. It has quickly developed a group of large scale dairy farms in central Canterbury and currently has total assets of $135m. It has already produced 60,000 tons of milk from it's 10,000 cows and it will be building a whole milk powder plant south of Dunsandel over the next year. Production is scheduled to begin in August 2008 to match the current global dairy boom.

In addition to Mitsui's investment in Synlait, the two companies will enter into an agreement that will see Mitsui provide Synlait with supply chain management, moving the product from the Dunsandel factory to Synlait's international customers, espesially Chaina, Southeast Asia and the Middle East.

Over the past decade global demand for dairy products has been rising by 4% per annum and supply has increased by only 2% resulting in unprecedented commodity prices over the past year. Growth in demand for dairy as Asia moves to western eating habits, change in agricultural policy in Europe, and an unprecedented move to bio-fuel production from grains traditionally fed to livestock in North America is thought to be the key long term drivers of the change in international market conditions.

There is now general agreement that the strong demand at current prices continues point to a structural change in world commodity prices.

Positioned on the Pacfic Rim and with virtually the only dairy industry in the world not based on feeding large amounts of cereal grain to produce milk New Zealand is exceptionally well positioned to take advantage of these new global prices.

Mitsui and Synlait are agreed that they are looking forward to playing a key role in the ongoing development of the New Zealand dairy industry through this exciting phase.

Notice:
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission. This press release is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Synlait Limited
John Penno, CEO
Telephone:64-3-318-0985
Mitsui & Co., Ltd.
Corporate Communications Division
Telephone: +81-3-3285-7566
Facsimile: +81-3-3285-9819