Announcement on noncompliance of JIS standards by a subsidiary of Shinko Wire Company, Ltd.

June 9, 2016

Shinko Wire Stainless Company, Ltd., a 100% owned subsidiary of Shinko Wire Company, Ltd., was found to have altered the tensile strength test results for a portion of the stainless steel wire for springs (JIS G 4314) it produced and had shipped this substandard product. Shinko Wire Company is an affiliate 30.7% owned by Kobe Steel, Ltd.

After a subsidiary was found to have violated the JIS (Japanese Industrial Standards) regulations in 2008, Kobe Steel promoted activities to strengthen quality assurance systems within the Kobe Steel Group. Kobe Steel deeply regrets that it again faces such a situation. It sincerely apologizes for causing considerable concern and trouble to customers and other parties.

Inspection records revealed that test results were altered during a period of nine years and two months (April 2007 to May 2016). Displaying the JIS mark, Shinko Wire Stainless Company shipped 55.6 metric tons of stainless steel wire for springs (JIS G 4314). By application, about 74% of the wire was used in appliances and household goods; 12% in water heaters and other gas equipment; and 6% in the automotive field. Applications for the remaining 8% have not been determined at this time. With the cooperation of spring makers to which the wire was shipped, we will check on any quality or safety problems concerned among final end users.

Kobe Steel takes this situation very seriously. To prevent such a situation from occurring again, Kobe Steel will establish an investigation committee and consult with outside experts to thoroughly determine the cause and implement measures to prevent recurrence.

Note:

The tensile strength of the stainless steel wire for springs involved was 96 percent or higher than the lower limit of the standard. Considering the general design margin for springs, the risk of breakage is estimated to be extremely low. However, Kobe Steel will continue to proceed with investigation and confirmation.

For reference

Outline of Shinko Wire Company, Ltd.

Name:
Shinko Wire Company, Ltd.
Head office:
Amagasaki, Hyogo Prefecture
Plant:
Amagasaki, Hyogo Prefecture / Kakogawa, Hyogo Prefecture
Representative:
Koji Fujii, President
Employees:
About 850 (consolidated)
Capital:
8,062 million yen
Equity stake:
Kobe Steel, Ltd. 30.7%
(Listed in the Second Section of the Tokyo Stock Exchange)
Sales:
About 29 billion yen (consolidated, fiscal 2015)
Business activities:
Manufacture and sale of steel wire products

Outline of Shinko Wire Stainless Company, Ltd.

Name:
Shinko Wire Stainless Company, Ltd.
Head office:
Izumisano, Osaka Prefecture
Plant:
(same as above)
Representative:
Kazuyoshi Yamaguchi, President
Employees:
About 50
Capital:
99 million yen
Equity stake:
Shinko Wire Company, Ltd. 100%
Sales:
About 1 billion yen (Fiscal 2015)
Business activities:
Manufacture of stainless steel wire products (sales by Shinko Wire)

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