The market for overseas business in 2001 was characterized by recession followed by multiple terrorist attacks in the United States, and also by the relocation of production facilities of Japanese manufacturers to China and Central Europe. Kajima followed the latter trend by opening offices and expanding its business activities in Shanghai, Poland and Czech Republic.

At the same time, Kajima has carried out a great deal of work on localization in countries in which it has subsidiaries, such as the United States, Southeast Asia, Taiwan and Europe. In each instance, the amount of work undertaken for local clients was in excess of that for Japanese clients. As a result, despite the downturn experienced this fiscal year in the United States, the total amount of contracts has been sustained by the winning of large local contracts in regions other than the United States, and recorded contracts worth a total of 116.9 billion, on a par with the previous year.

The business that Kajima directly manages is primarily in the civil engineering field. In Taiwan, the Company has won large contracts of subway tunnels and recorded 39.3 billion. With the prospect of cutbacks in official development assistance (ODA) projects, Kajima's long-term strategy is to expand its market to include locally funded projects. The work on the subway is part of that strategy.

Kajima U.S.A. Inc. (KUSA) handles the U.S. market, and until last year IT-related companies were the mainstay of the contracts it won, and therefore, its revenues. The Company has therefore had to suffer substantial reductions in both, but in the development sector, Industrial Developments International, Inc. (IDI), which has been involved in the development of distribution warehousing, has succeeded in securing profits in excess of the previous year for the Company overall, through the sale of superior properties at high profit. The Philadelphia Eagles Stadium project managed by KUD International LLC (KUD), which is also involved in development, is going well, and is on target for completion in the spring of 2003.

Meanwhile, the Hualalai Hawaii luxury resort, which is developed independently, is proceeding smoothly and has won approval to undertake additional site development.

Kajima Overseas Asia Pte. Ltd. (KOA), which is responsible for the Southeast Asian region, succeeded in winning the contract to build a large semiconductor factory in Singapore, and securing contracts from Japanese companies in Thailand and Malaysia. Its total contracts are substantially up from the previous year to 25.1 billion. The result has also brought higher profitability than the previous year. The operation of hotels has suffered from the fears

generated by the multiple terrorist attacks in the United States. The Company has nevertheless been able to minimize the decline in performance by improving quality and service, and effective cost-cutting. The profits secured are commensurate with those of last year.

Chung-Lu (Sino-Kajima) Construction Co., Ltd., whose market is Taiwan, had an outstanding year in 2001. Primarily due to the construction of a large Japanese manufacturer and locally owned apartments, contracts for the year doubled to a total value of 27.5 billion. Associated revenues also increased substantially, and the profit for the period improved.

Kajima Europe B.V. (KE), responsible for Europe, was awarded contracts for a large local office building in England, and for several proposals for Japanese manufacturers on the Continent. Contract values and revenues increased substantially as a result. At the same time, in development, work on the One London Wall office development commenced in the City of London in September, and the Cambridge municipal office building, KE's first private finance initiative (PFI) project in the United Kingdom, received development approval in December, with work commencing in early 2002. In the Saint Endreol resort project in southern France, sales of townhouses and individual dwellings opened officially in April 2001, and the product has been met with favor by the market.

A feature of direct operations was that some 94% of orders came from Taiwan and Southeast Asia. In the coming fiscal year, Kajima again has Taiwan in its sights as a source of contracts, which means the trend will probably continue for some time to come.

Major completed projects for the year included the construction of a 240,000-square-meter platform on a 400,000-square-meter site for the depot for the MRT Chaloem Ratchamongkhon Subway Line in Thailand; the Japan-Palau Friendship Bridge, a three-span extradosed bridge in Palau, with a length of 413 meters; the Exchange Center in Singapore, which is a 29-floor twin tower; the 11-block condominium complex totaling 1,156 dwellings that comprises HDB Jurong West; and in the United States, the Verio Premier Data Center, a large IT-related project.

Domestic operations:
Design

Overseas operations:
Research and Development