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Kobe Steel plans capital investments of 92 billion yen in fiscal 2008

April 25, 2008

TOKYO, April 25, 2008 - Kobe Steel, Ltd. plans capital investments of 92 billion yen in fiscal 2008, ending March 31, 2009.

Kobe Steel will carry out projects to improve its line-up of ."Only One" upper-end products and upgrade its manufacturing capabilities to increase the competitiveness of the company.

Most of the investments are in the Iron & Steel segment. At the Kakogawa Works, the company plans to increase sintering capacity. Kobe Steel will also increase the production capacity at the Takasago Works' Steel Casting and Forging Plant, which makes crankshafts for large ships. An environment-related investment is the installation of denitration equipment at the sintering plant in the Kakogawa Works.

Capital investments in fiscal 2008 will be less than the 114.6 billion yen spent in fiscal 2007. Much of the higher capital expenditure last year went to refurbishing and rebuilding two blast furnaces, one at the Kakogawa Works and the other at the Kobe Works.

Construction costs and outlays (parent only)
(in billions of yen) FY2007 FY2008 (planned) % of change
Construction costs
Iron & Steel only
114.6
94.0
92.0
69.0
(20%)
(27%)
Outlays
Iron & Steel only
112.4
85.8
110.0
88.0
(2%)
3%
Depreciation
Iron & Steel only
76.4
57.7
94.0
67.0
 
Notes: Iron & Steel segment figures are a subset of each category.
Outlays may include payments for work completed in a previous fiscal year.

Investments by segment (parent only, construction cost basis)
(in billions of yen) FY2007 FY2008 (planned)
Iron & Steel 94.0 69.0
Aluminum & Copper 12.4 12.0
Others 8.2 11.0
Total 114.6 92.0

Main projects for fiscal 2008:

Iron & Steel Segment
Kakogawa Works
Project:   Increasing sintering capacity
Products:   Steel sheet, plate, wire rod, etc.
Amount in FY2007:   2.8 billion yen
Total investment:   2.8 billion yen
Construction period:   :April 2007

Kakogawa Works
Project:   Installation of denitration equipment at the sintering plant
Products:   Steel sheet, plate, wire rod, etc.
Amount in FY2007:   3.3 billion yen
Total investment:   15.0 billion yen
Construction period:   :December 2007-March 2010

Takasago Works:
Project:   Increasing production capacity of steel castings and forgings
Products:   Marine crankshafts
Amount in FY2007:   2.5 billion yen
Total investment:   30.0 billion yen
Construction period   :July 2008 - March 2010

Previous Major Capital Investment Projects
Iron & Steel segment
Facility Project Products Amount* Construction Period
Kakogawa Works New vacuum degassing equipment and desulfurization equipment High strength steel sheet, specialty steel, etc. 5.0 Sept. 2003 to Oct. 2004
Kobe Works New construction of No. 5 continuous bloom caster High quality specialty steel 8.5 Apr. 2004 to Aug. 2006
Kobe Works Upgrading of bar mill to improve product quality and inspection High quality specialty steel 1.0 Nov. 2005 to Mar. 2007
Kakogawa Works Refurbishment of No. 2 blast furnace Steel sheet, plate, wire rod, etc. 40.0 Sept. 2004 to May 2007
Kobe Works Rebuilding of No. 3 blast furnace High quality specialty steel 10.0 Nov. 2007 to Dec. 2007
*In billions of yen

Aluminum & Copper segment
Daian Plant Installation of No. 4 mechanical forging press Aluminum forgings for suspensions, etc. 1.0 Apr. 2004 to Sept.2004
Moka Plant Replacement of motor at hot strip finishing mill Aluminum sheet (for automotive panel material, bottle can stock, etc.) 0.7 Apr. 2004 to Jan. 2005
Moka Plant Remodeling of No. 1 cold rolling mill to increase rolling speed Aluminum sheet 1.4 Apr. 2005 to Feb. 2007

Reference


Capital investments in previous years (in billions of yen)
Fiscal years Construction costs Outlays Depreciation

1999

56.0 69.0 71.8
2000 57.0 40.0 69.2
2001 43.9 51.3 65.7
2002 24.0 25.0 61.4
2003 35.8 33.1 56.5
2004 46.2 35.3 54.8
2005 58.5 54.1 51.9
2006 96.2 76.3 56.0
2007 114.6 100.0 76.4
2008 (planned) 92.0 110.0 94.0
Note: The highest amount of capital investment in the past 20 years was 186 billion yen in fiscal 1991.