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December, 2006

Contacto: Kathy Brysse
mediaeurope@gates.com

Gates signs new long-term agreement with JCB

Trevor Latham, group purchasing director JCB, Lou Braga, president, Gates Worldwide Fluid Power Division and François Hincker, vice president, Gates Fluid Power Europe signed a new three year agreement for Gates to be the majority supplier of hose assemblies and related products to JCB, the world’s fourth largest and fastest growing construction equipment manufacturer in the world with headquarters in Rocester, UK. This contract assures the supply of products from the hose assembly operations in St. Neots, UK and Karvina, Czech Republic until 2010.

This is the third three-year agreement signed between the two companies but the first one based, as Trevor Latham commented, on total cost management through Value Engineered and Value Added initiatives. It is also the first of its kind that JCB has signed with any other supplier.

Being awarded a long-term contract is the result of the continuous efforts of all Gates associates to supply parts defect free and on time, meeting and exceeding JCB’s expectations. Without the dedication from Product Development, Customer Service, Sales, Product Marketing, Application Engineering, Manufacturing, Quality, and Supply Chain, including the Gates line side feeders and all other departments, we would not have the success we have today supplying JCB. As the new agreement is based on Value-added services and products, including the introduction of new technologies at JCB, the work now really has to start to prove we can continue to live up to the customers expectations, commented François Hincker. This three-year agreement will continue to be earned in the years to come.

It took the good part of 2006 to come to the final arrangement which does not only include the supply of parts and a list of VE/VA initiatives but also a renewed warranty agreement and a Kanban supply arrangement. It is truly based on cooperation between the two companies at all levels. Thanks to everyone who contributed in this major accomplishment.

Lou Braga committed to strengthen the relationship between Gates and JCB in other parts of the world such as India, where JCB has the largest market share for backhoes and to continue to invest in local manufacturing; China, where JCB recently opened a new manufacturing facility and the U.S. where Gates already supplies hose assemblies to JCB Savannah, Georgia.