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## Developing the Domestic Housing Stock Market 

Q6: Please tell us about your development of the housing stock market in Japan. 

## A6: We are constructing a business model to address the increase in home renovation demand. 

n 2009, the government put in place significant tax breaks for home renovations. This was followed by the launch of an eco-point system for housing. These two measures have com- bined to breathe life into the home renovation market. Aiming to turn this buoyant activity into solid growth, the JS Group is working to create a business model to meet the needs of this housing stock market. I 

LIXIL renovation network Tostem HomeWell, LIFA, Reform Magic, Inax Reform Network, TOEX Shizenyoku de Kurasu network, and Sun Wave Reform Shop R&B 

For starters, we will continue to take advantage of the existing LIXIL renovation network. To cap- ture home renovation demand, which comes in small orders and is geographically scattered, we will leverage nationwide sales channels to carry out sales activities which are geared towards local pref- erences and needs, thereby stimulating demand. Furthermore, we will utilize existing routes by adding more sales staff and developing eco-friendly products. 

As a new development, we will expand demand in new sales routes, such as utilizing condominium management companies under Jyu-Seikatsu Realty Corporation. We have extremely high expectations for the renovation demand that we can capture from the home center sales network, including Ken Depot and Viva Home. In the year ending March 31, 2011, we plan to open 43 new Ken Depot out- lets, and increase this number to 300 outlets in the next 3 years from the year ending March 31, 2011. We look for this business to serve as a one-stop shop for sub-contractors working with home builders. There has not been anything like this in Japan before. We will also search for other means to further boost sales such as the Internet, where we have seen a dramatic jump in access to our web site. 

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Notes: 1. Renovation sales refers to specialized renovation products, renovation channel, Tostem Online Corporation, Tostem Viva’s renovation division, TOEX renovation products, and sales of the building remodeling business. 2. Renovation sales exclude sales of Ken Depot. 

3. 

Renovation sales ratio represents renovation sales as a percentage of total sales in Japan. 

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Notes:1. Non-new construction sales include renovation sales as well as sales from installation and maintenance, solutions services for builders, home fire alarms, real estate-related business, Tostem Viva’s retail business (other than renovation), performance evaluations, land improvement work and land guarantee operations. 2. Non-new construction sales ratio represents sales in the non-new 

construction market as a percentage of total sales in Japan. 

