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Kobe Steel to open China headquarters

March 24, 2011

TOKYO, March 24, 2011 - Kobe Steel, Ltd. announces that its China headquarters will open on April 1. Called Kobelco (China) Holding Co., Ltd., the company will be the first headquarters established in China by a Japanese blast furnace steelmaker.

Based in Luwan District, Shanghai, the wholly owned subsidiary of Kobe Steel is capitalized at US$50.14 million. Kobe Steel added US$50 million to the existing US$140,000 capital of Kobe Steel Consulting Co., Ltd. to form the new company. With this amount of registered capital, the company will be able to make direct investments in China.

The main activities of the China headquarters will be efficient finance initiatives for financing, mergers and acquisitions, and cash management; strengthening group governance and risk management; and supporting group companies in China.

When the office opens in April, Kobelco (China) Holding will have 11 employees. The company was established in January. The chairman of Kobelco (China) Holding will be Hiroya Kawasaki, effective from April. Kawasaki is a Senior Officer at Kobe Steel and will continue in his current position. The president is Hiroshi Umeda.

The Kobe Steel Group in April 2010 launched its Medium- to Long-Term Vision, KOBELCO VISION "G," which aims to achieve consolidated sales of 3 trillion yen over the next five to ten years. Overseas sales are anticipated to make up about half of that amount, or 1.5 trillion yen. Further global development will be indispensable for Kobe Steel to achieve the goals of its long-term business plan.

To carry out this plan, the huge Chinese market is more important than before. Kobe Steel's current sales of 200 billion yen from China are anticipated to more than double in the future.

In its materials segments, the Kobe Steel Group has three companies in China for steel wire rod processing, two for the production of welding consumables, and one for copper sheet processing. In the machinery field, Kobe Steel has two units that assemble construction machinery and one that makes standard compressors.

Under KOBELCO VISION "G," Kobe Steel has set up a venture for aluminum forgings, increased production of hydraulic excavators and standard compressors, and plans to manufacture crawler cranes in China.

In total, Kobe Steel currently has 31 companies in China, of which 16 are consolidated subsidiaries, and employs over 3,000 people. Each of its locations is anticipated to expand, and Kobe Steel is also considering other new locations.

Kobe Steel's China headquarters was established on this background. In the Chinese market, which is anticipated to continue growing, Kobe Steel aims to increase its profitability by utilizing its comprehensive capabilities. With its China headquarters as its base, Kobe Steel plans to centralize financing and cash management, strengthen group governance, support group companies, and promote lateral communication within the Kobe Steel Group in response to the growing Chinese market.

Also on April 1, Kobe Steel will launch a Chinese-language home page to improve its global Web site. The Chinese site will introduce Kobe Steel's businesses and products, as well as social contributions in China. By actively providing information, Kobe Steel intends to increase the recognition of the Kobe Steel Group and raise its brand value in China.