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Kobelco opens new compressor plant in California, USA

April 14, 2011

TOKYO, April 14, 2011 - Kobe Steel, Ltd. announces that subsidiary Kobelco Compressors America, Inc. (or KCA) is opening a new $20 million factory complex that will double its manufacturing capacity of compressor systems. KCA has also moved its headquarters to the new facility.

KCA today (April 14, Pacific Daylight Time) is holding a grand opening of its new headquarters and factory. Today also marks the start of commercial operations at the new plant.

Approximately 150 guests, including Corona Mayor Stan Skipworth, are anticipated to attend the opening. From Kobe Steel, Executive Vice President Kazuo Shigekawa will participate in the event.

Formerly known as Kobelco EDTI Compressors, Inc., KCA is anticipated to play a leading role in the Kobe Steel Group's process gas compressor business covering North, Central and South America.

Based in Corona, California, 48 miles (about 80 kilometers) east of Los Angeles, KCA designs, manufactures and sells compressor systems. Among its customers are Exxon Mobil Corporation, Petróleo Brasileiro S.A (Petrobras) of Brazil, oil refining companies and petrochemical firms. The company is 100% owned by Kobe Steel and is capitalized at $5 million. The business began in 1990 and Kobe Steel first took an equity share in 2003. KCA employs about 200 people, and the president is Tetsuya Kakiuchi. Sales in 2010 reached $51 million.

Investments for capacity expansion to meet rising energy demand in North, Central and South America are promising over the medium- to long-term future. Environmental investments are also growing due to stricter regulations. As a result, demand for compressor systems is anticipated to steadily grow not only in traditional markets such as the petrochemical and oil refining industries, but also for gas turbine power generation, offshore oil and gas exploration, and LNG receiving terminals.

Since Kobe Steel's initial investment in KCA in 2003, the company has steadily expanded its operations. In 2008, KCA completed the No. 2 Plant, increasing production capacity to $50 million dollars. Business conditions continued to remain strong in 2010, resulting in orders totaling $86 million. The facility is currently in full production and even warehouses outside the premises are being used to store parts. Construction of the No. 3 Plant began in August 2009. With the start-up of the new facility, manufacturing capacity has doubled to $100 million.

Kobe Steel manufactured Japan's first reciprocating compressor in 1915. With a history going back nearly 100 years, Kobe Steel is regarded as Japan's leading comprehensive manufacturer of compressors. KCA's new facility will enable Kobe Steel to accelerate its global growth and build a strong base for its compressor business, as it focuses on becoming a top-class, comprehensive manufacturer of compressors in the world.