Additional cancellation of JIS certification at Kobe Steel subsidiary Kobelco & Materials Copper Tube Co., Ltd.

We deeply apologize once again for the enormous amount of trouble we have caused to customers, suppliers, shareholders and many others concerning the improper conduct at Kobe Steel, Ltd. and its group companies.

Following the announcement of “Improper conduct concerning a portion of the aluminum and copper products manufactured by Kobe Steel” on October 8, 2017, subsidiary Kobelco & Materials Copper Tube Co., Ltd. (or KMCT) underwent an examination of its improper conduct by the JIS certification body Japan Quality Assurance Organization (JQA). As KMCT had shipped products displayed with the JIS mark, despite those products not meeting JIS standards, KMCT received today a cancellation notice of its JIS certification for “JIS H3330 insulated copper tubes.” In addition, KMCT’s “JIS H3300 for copper and copper alloy seamless tubes” was subject to cancellation on October 26, 2017.

Due to the suspension of the JIS certifications, KMCT is unable to ship the concerned products displayed with the JIS mark. However, it can supply products that are equivalent to the JIS standards in terms of performance. Responding in sincerity, KMCT will contact and explain the situation to customers to which the concerned products were shipped.

Concerning the improper conduct that took place in the Kobe Steel Group, Kobe Steel announced on November 10, 2017 that it had compiled the “Report on investigation into the causes of the Kobe Steel Group’s inappropriate conducts and on measures to prevent recurrence.” In the Aluminum & Copper Business, Kobe Steel established the Quality Assurance Department on November 27 2017. The Quality Assurance Department, which is under the direct control of the Aluminum & Copper Business, undertakes the role of quality control; the audit function for quality assurance; and education and training at the business locations and group companies, including KMCT, of the Aluminum & Copper Business. In addition, as a measure to deal with the investigation process at KMCT, Kobe Steel plans to establish an automatic retrieval system for test verification data. Furthermore, based on the findings in a report to be made in the future by the Independent Investigation Committee, which consists only of outside members, Kobe Steel will then proceed to consider various measures, which will be reflected in its final measures to prevent recurrence.

KMCT will steadily implement measures to prevent recurrence and correct the problems that led to the quality management deficiencies, which caused the cancellation of the JIS certifications. KMCT aims to restore its JIS certifications and recover the trust of its customers as quickly as possible.

The impact of this incident on business performance is unclear at this time. Kobe Steel plans to make an announcement when the extent of the impact becomes clear.