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Kobe Steel to set up welding company in India

April 18, 2011

TOKYO, April 18, 2011 - Kobe Steel, Ltd. plans to establish a company in June to sell welding consumables and provide sales support and maintenance services for welding robot systems in India.

To be called Kobelco Welding India Pvt. Ltd. (or KWI), the company will be based in Gurgaon, Haryana state, about 30 kilometers southwest of New Delhi. KWI will be capitalized at 5 million rupees (about 9 million yen). Kobe Steel will hold an 80% share, while group companies Kobe Welding (Singapore) Pte. Ltd. will hold 10% and Taseto Co., Ltd. will hold the remaining 10%. The company will have a staff of five people, including two Japanese.

In addition to marketing, KWI will search for new sources of raw materials for welding consumables and support procurement.

Demand for welding consumables is growing significantly in India. As many power plants are planned to be constructed, demand for welding products in the energy field is expected to grow.

Kobe Steel's Welding Business anticipates rising sales mainly for high value-added welding consumables, one of its strengths. For Japanese users in the heavy electrical machinery, construction equipment and automotive fields that have already entered India or plan to do so in the future, it is urgently necessary to build a framework to provide total support in India for not only welding consumables, but also welding robot systems.

In addition, the Welding Business intends to develop new sources of wire rod and fluxes, the raw materials used to make welding consumables. To strengthen its cost competitiveness, the Welding Business needs to find new suppliers of raw materials and support procurement.

KWI will enable the Welding Business to address the growing Indian market directly and provide the potential for further development. The new company is positioned as a strategic operation that will strengthen the Welding Business' marketing capabilities in India and promote effective marketing in coordination with operations in Southeast Asia. Creating a business structure in India and building a base for the training of national staff will enable the Welding Business to increase its competitiveness.

Note

High value-added welding consumables are such products as welding consumables for heat-resistant, low-alloy steel; welding consumables for nickel-based alloys; welding consumables for stainless steel; and welding consumables for low-temperature steel. They are different from standard welding products, which include welding consumables for mild steel.