Why has NICIGAS been able to gain the trust of over 1,300,000 customers?

We have been committed to providing our customers with energy safely, inexpensively, and in a stable manner. Safety and stability in particular are obvious areas of focus for energy companies. In addition to providing around-the-clock/365-days-a-year safety and security services, implementing safety equipment to prevent accidents, and engaging in other such efforts in a steady manner, we strive to increase our reliability further through capital expenditures and other means. Further, in order to provide the necessary energy as inexpensively as possible, we work to streamline logistics and other work thoroughly, thereby achieving a sales price that is below the average.

NICIGAS continues to evolve in preparation for the deregulation of energy.

Japan's energy business is accelerating its pace toward deregulation. In light of that trend, NICIGAS has for some time been preparing to verify and begin operation of the core business cloud system "Kumo no Uchusen," which utilizes a link between cloud services and mobile devices, in an aim to become an integrated energy company. In addition, NICIGAS has proactively launched business in the United States and Australia, where deregulation has already been achieved. The reason is that we want to accumulate expertise and provide our customers with energy in a better manner when Japan deregulates energy. Of course, we have established local corporations to grow organically, providing electric power and gas while pouring in the expertise we have cultivated up to this point. This has enables our group companies in the United States to become a company that is embraced by 211,000 households (as of March 31, 2017).

In addition to each of the NICIGAS Group city gas companies throughout the Kanto Region, we have established 6 branches and more than 60 sales offices, and have created a structure that enables us to respond to the requests of our customers. Through activities that are deeply rooted in the local community, each of those sites aims not only to provide detailed services, but also to become part of the daily lives of our customers, even if it is only in a small way.

The Industry's Top Safety Structure

NICIGAS' most important product is safety. The "Kumo no Uchusen" business system uses on-site mobile devices to automatically check for incorrect or missing processing related to safety. The content of that processing is automatically processed by the cloud system, then synchronized with the necessary departments and locations, accurately and in real time, thereby providing an extremely advanced safety structure. Further, we aim to create the industry's top safety structure by conducting appropriate safety inspections in an efficient and timely manner and strengthening our ability to respond to emergencies, through in-house safety inspections and periodic disaster-preparedness drills.

Logistics Restructuring Scale-up

NICIGAS' LP gas distribution method consists of transporting, in bulk, tanks from hub terminals that operate every day of the year near propane gas import bases by trailers which also serve as container storage locations. The tanks are delivered to unmanned depots bases throughout the Kanto Region, loaded onto smaller trucks, and delivered to individual customers. In addition, by controlling those operations via the cloud, we have been able to significantly decrease costs. Further, we aim to increase the scale of our efficient delivery system by increasing the size of our hub terminals and adding depot bases.

The core business cloud system "Kumo no Uchusen" has made tremendous streamlining possible.

The core business cloud system "Kumo no Uchusen," which utilizes cloud computing, plays a vital role in the restructuring of logistics as well as the upgrading of safety work. This system makes it possible to install a QR code on the gas meters of all customers that use propane gas and use a smartphone to read that QR code and acquire the latest customer information in real time via the cloud. Application of the latest information to work such as delivery, safety, and meter reading makes it possible not only to increase the reliability of information, but also to increase the efficiency of work significantly. In addition, the "Kumo no Uchusen" business system can be expected to have significant impact not only in the gas industry, but also in other energy business, including electric power and water supply. Because of this, NICIGAS has established "Kumo no Uchusen Co., Ltd." as a joint venture with KDDI Corporation and Hitachi Capital Corporation in order to sell the system to energy businesses as an effective tool, in anticipation of the future deregulation of energy. It contributes to the consolidation and streamlining of work in a variety of areas.

The core business cloud system "Kumo no Uchusen" and overseas business strategy will play a vital role in the response to deregulation in Japan.

Until now, city gas has been a regulated industry, with business operators designated in each region, making new entry impossible. However, in conjunction with the full deregulation of retail sale of electric power and city gas scheduled to begin in 2016, in the future, regulations will be removed from the energy industry overall, and customers will be able to select their desired electric power and city gas companies as well, in the same manner as with LP gas. Accordingly, how companies are able to contribute to customers as providers of energy business will be an important point. Unless companies can respond to the individual needs of customers as much as possible and thoroughly satisfy them, rather than merely providing a low price and reliability, those companies will not be selected. To this end, NICIGAS has verified and implemented the core business cloud system "Kumo no Uchusen," and is preparing to develop into a comprehensive energy retail business. We diligently strive to provide energy to customers in the United States and other areas where free competition already exists. We desire to learn from that experience and identify what will customers will find satisfying, and what types of service are possible, then utilize that expertise for the benefit of our customers in Japan.

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• Entrust Energy, Inc. (EE)/ Texas, U.S.A., Electricity retail business

  In 2011, NICIGAS established Entrust Energy (EE; an affiliate accounted for by the equity method) and started electricity retail business in Texas, U.S.A., based on its know-how and track record built in business operation in Australia. Starting from zero, EE has increased the number of customers and currently serves to approximately 157,000 (as of Dec. 2017). In Texas, a fully deregulated market, EE employs multi-channel sales strategies, including door-to-door sales, telemarketing, and the Internet.

• Entrust Energy East, Inc. (former North Eastern States, Inc.)/ Northeastern United States, Electricity and gas retail businesses

  Following the launch of EE, in 2012, NICIGAS established Entrust Energy East, Inc. (formerly North Eastern States, Inc.: an affiliate accounted for by the equity method) to carry out an electricity and gas retail businesses in seven states in the northeastern U.S.A. (Pennsylvania, New York, Illinois, Ohio, New Jersey, Connecticut, and Maryland), and its full-scale sales activities was taken off in August 2013. The company has steadily increased the number of customers and currently serves to approximately 90,000 (as of Dec. 2017). In the northeastern U.S.A., where energy deregulation is progressing rapidly, the company provides competitive, high-quality products and services that meet consumers needs.

• EnergyLink Holdings Pty Ltd. (former COzero Holdings Ltd.)/ Australia, Electricity energy management services (EMS)

  In August 2013, NICIGAS started capital and management participation in EnergyLink Holdings Pty Ltd. (former COzero Holdings Ltd.), an Australian electricity energy management services (EMS), through the acquisition of shares (25.85% equity interest). The company engages in energy-conservation and electricity retail sales for commercial and industrial applications, utilizing EnergyLink, an evolved form of smart meter. NICIGAS has dispatched directors to The company and is working to increase its investment value. At the same time, NICIGAS is accumulating business know-how related to energy conservation in the field of retail sales, a crucial business area in Japanese deregulated energy market.