Health-food Business

The Company has been involved in research to identify the functional ingredients and physiological properties of kombu (kelp) “fucoidan,” agar “agaoligo,” Ashitaba “chalcone” and mushroom “polyterpene.” The Company has also been involved in the development, manufacture, and sale of health foods containing these ingredients. The company transferred the distribution function of health foods to Takara Healthcare Inc., a 100%-owned subsidiary of Takara Holdings Inc. in October 2006. Thanks to this move, the Company can focus on and specialize in the research and development as well as commercialization of new functional food materials―our traditional strength― allowing us to concentrate our management resources in these areas and strengthen our earning power.
The Company is now developing new health foods under the trade name “YamsgeninTM” that contain compounds having anti-fatigue effects derived from yams. We have also isolated “bioactive osteocalcin” derived from boiled pig bones.

1.Kombu “Fucoidan”

Fucoidan, a clingy substance found in kombu and other types of seaweed, is a macromolecular polysaccharide containing several sugars. Using the Company’s unique technology to analyze complex carbohydrates, Takara Bio has become the first in the world to identify three different chemical structures in the dietary fiber fucoidan that is found in Gagome kombu. These are named F-fucoidan, U-fucoidan and G-fucoidan.Through further research, we have discovered many of fucoidan’s physiological activities, including the induction of interleukin-12 and interferonγ, which are both believed to be effective in the treatment of cancer and viral infections, and to also have the ability to suppress thrombus formation. Takara Bio is now commercializing of fucoidan as a functional food material.

2.Agar “Agaoligo”

Agar is gaining attention as an ingredient useful for maintaining health. It is called “The king of dietary fiber” and has long been consumed in Japan as a traditional food. Agar “Agaoligo” is derived from agar, which is made from seaweed (like kombu) such as tengusa. The Company has discovered that it possesses antiinflammatory, antioxidant, cancer prevention and detoxifying properties. In the future, through the creation of a wide range of agar products containing agaoligo, we plan to increase the demand for agar products.

3.Ashitaba “Chalcone”

Ashitaba is indigenous to Japan and grows wild on the Pacific coast, mainly on the Izu islands. Ashitaba is known for its strong vitality as indicated by the saying, “If Ashitaba leaves are picked today, new leaves will be in place by tomorrow.” Ashitaba is rich in vitamins, minerals and dietary fiber. Takara Bio offers Ashitaba grown in domestic farms with quality soil conditions. We also run Ashitaba juice bars, known as “Ashita- BarTM,” in Tokyo and Osaka. In an experiment using a diabetic mouse model, the Company discovered that the Ashitaba “chalcone” suppresses a rise in blood sugar level, and the Company is now pursuing the development of Ashitaba products containing chalcone as “foods for specified health uses.”

4.Mushroom “Polyterpene”

Through a number of research projects into the tumorinhibiting properties of mushrooms, Takara Bio has discovered that polyterpene, a compound found in Bunashimeji mushrooms, can inhibit tumor growth. The Company has already registered a substance patent for polyterpene. We continue to research the physiological properties of polyterpene and plan to develop functional food materials containing it.

Mushroom Business

Takara Bio was the first company to succeed in the large-scale cultivation of Bunashimeji mushrooms, which are now widely available at most supermarkets. In 1973, we offered our large-scale cultivation method to JA ZENNOH (National Federation of Agricultural Co-operative Associations) Nagano, and succeeded in the commercialization of this mushroom. We have licensed the large-scale cultivation methods for Bunashimeji mushrooms to JA ZENNOH Nagano and Yukiguni Maitake Co., Ltd., and we are now involved in the production and sale of Hatakeshimeji and Honshimeji mushrooms.
Hatakeshimeji mushrooms are produced by Mizuho Nourin Co., Ltd., a joint venture company with Kyotanba-cho, Kyoto Prefecture and the Mizuho-cho Forestry Association. Mizuho Nourin is expected to produce about 1,200 tons of mushrooms in fiscal 2008. We produce Honshimeji mushrooms in Yokkaichi City, Mie Prefecture, and expect to produce about 26 tons in fiscal 2008.
In order to focus on the development of largescale cultivation methods for the production of mushrooms as well as to concentrate our management resources, the Company entered into a sales partnership with Yukiguni Maitake. Starting in September 2006, Yukiguni Maitake began handling the sale of the Company’s Hatakeshimeji and Honshimeji mushrooms.
In our overseas operations, a joint venture company formed between Takara Bio and Pulmuone Co., Ltd., a premier natural food products manufacturer in Korea, is using our large-scale cultivation methods to produce and sell Bunashimeji mushrooms in Korea.
As for research and development in the mushroom- related business, the Company is working on developing a new cultivation method for the growth of other high value-added mushrooms utilizing information from the sequencing of the Matsutake genome.