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Kobe Steel to construct testing facility for large turbo compressors

New 4.1-billion-yen facility to be completed in 2010

May 28, 2008

TOKYO, May 28, 2008 - Kobe Steel, Ltd. announces that it has begun construction of a large-capacity compressor testing facility at its Takasago Works in Hyogo Prefecture, Japan. Kobe Steel plans to invest 4.1 billion yen in the new facility, which will go into operation in April 2010.

The new facility will be able to test large-capacity rotating machinery, mainly turbo compressors, with variable-speed motors rated up to 20,000 kW. Kobe Steel's testing capacity will increase by 50%, in comparison to the current level. Testing facilities are essential to confirm the design performance of compressors, a major product of Kobe Steel's Machinery segment. The new testing facility will enable Kobe Steel to enter the large-capacity turbo compressor market.

Kobe Steel anticipates that numerous projects in the future, both in Japan and overseas, will need large turbo compressors. Two examples are oxygen plants in steel mills and the manufacturing of liquid crystal displays. Kobe Steel estimates that it currently has a 10 percent share of the world market for the integral-gear variety of turbo compressors. The company anticipates that by expanding into large-capacity compressors, it will be able to gain a 20 percent share of the integral-gear compressor market in the future.

In the Kobe Steel Group's Machinery segment, business has been brisk from the oil refining, petrochemical and energy industries. In recent years, Kobe Steel has been developing the global market including the United States, Europe, China and the Middle East. It has also been supplying compressors of higher pressure and with larger capacities. Owing to strong demand, Kobe steel doubled total compressor sales to 700 billion yen between fiscal 2002 and fiscal 2007. Sales in fiscal 2008 are also anticipated to increase further.

In 1915, Kobe Steel began production of Japan's first reciprocating compressor.  From this start, it has been growing its compressor business for nearly a century.  Kobe Steel is Japan's top comprehensive manufacturer of compressors.  It currently makes screw, centrifugal and reciprocating compressors - the only company that produces all three types.

	Method of Compression	Major Uses
Screw	Uses twin helical rotors.	Oil refining, petrochemicals
Centrifugal (turbo)	Uses the centrifugal force from an impeller and the dynamic lift from the blades.	Oil refining, petrochemicals, air separation
Reciprocating	Uses the reciprocating action of a piston in a cylinder.	Oil refining, LNG bases

About Kobe Steel
In addition to a wide array of industrial machinery and engineering services, Kobe Steel is one of Japan's leading steelmakers and producers of aluminum and copper products. Other businesses include welding consumables, wholesale power supply, construction machinery, real estate, and electronic materials. For more information on Kobe Steel, please visit: www.kobelco.com