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Environmental Management
Sustainability Report 2006

Relations with Customers and Business Partners
To supply products that meet the satisfaction and retain the trust of customers and business partners all round the world, the Kobe Steel Group undertakes rigorous quality control and has put in place a management system to respond more swiftly to individual customer requirements.


Quality Assurance & Quality Control
Quality Assurance System
To be able to supply products to satisfy its customers, the Kobe Steel Group is promoting quality assurance and quality control by achieving more widespread compliance with the international standard ISO9001 for quality management systems.


Kobe Steel Facilities Compliant with ISO9001:
 
Facility name Date compliance achieved
Kakogawa Works Titanium Plant October 1994
Plate Mill June 1995
Wire Rod Mill December 1996
Sheet Mill November 1997
Kobe Works   November 1997
Takasago Works Steel Casting and Forging Plant January 1994
Titanium Plant December 1999
Steel Powder Plant January 1998
Machinery Plant September 1992
Equipment Plant March 1996
Harima Plant Standard Compressor Plant April 1999
Ibaraki Plant   March 1998
Daian Plant   September 1997
Chofu Works   September 1999
Moka Plant   December 1998


Kobe Steel Group Companies Compliant with ISO9001:
 
Company Facility Date of compliance
Kobelco Eagle Marine Engineering Co., Ltd. All March 1994
Shinko Wire Company, Ltd. Amagasaki Plant July 2000
Onoe Plant February 1997
Ceratechno Co., Ltd. Headquarters, Akashi Plant April 2005
Bizen Plant April 2005
Nippon Koshuha Steel Co., Ltd. Toyama Works January 1996
The Kansai Coke and Chemicals Co., Ltd. Kakogawa Plant March 2005
Sakai Steel Sheets Works, Ltd. All (titanimum products only) April 2005
Sanwa Tekko Co., Ltd. Inuyama Plant June 2002
Kobe Special Tube Co., Ltd. Chofu-Kita Plant November 1992
Shinko Bolt, Ltd. Headquarters and all branches December 2002
Tesac Wirerope Co., Ltd. All April 1999
Shinko Actec Co., Ltd. Hidaka Plant September 2004
Shinko Welding Service Co., Ltd. Headquarters December 2005
Kobelco & Materials Copper Tube, Ltd. Hatano Plant April 1998
Thailand Plant November 2000
Malaysia Plant September 1996
Sun Aluminium Industries, Ltd. All September 1999
Shinko-North Co., Ltd. All June 1999
Shinko Metal Products Co., Ltd. All April 1995
Niko-Aluminium Industries, Ltd. One dept. at Moka Plant December 1998
Shinko Leadmikk, Ltd. All April 2000
Shinko Inspection & Service Co., Ltd. Headquarters December 2005
Kobelco Research Institute, Inc. Sputtering Target Division February 1999
Kobelco Construction Machinery Co., Ltd. Hiroshima Plant February 1998
Kobelco Eco-Solutions Co., Ltd. Headquarters February 1997
Harima Plant October 1996
Technical Research Center February 1997
Shinko Engineering Co., Ltd. Main plant, all branches December 1995
Shinko Electric Co., Ltd. Toyohashi Plant July 1995
Ise Plant June 1995
Genesis Technology Inc. Nishiwaki Plant November 2003
Tokorozawa Plant February 2003
Kyushu Plant May 2002



Quality Assurance for Products for the Auto Industry
The Daian plant is the Aluminum & Copper Company's main plant for cast and forged aluminum parts largely for the auto and aircraft manufacturing industries and aluminum machined parts for semiconductor and LCD manufacturing equipment. It is set up to meet diversified customer needs, not only for large-scale production but also small-quantity production of many different types of parts.

The plant's compliance with ISO9001 dates back to September 1997, and in September 2004 it achieved compliance with the automotive sector standard ISO/TS16949 (replacing the automotive quality standard QS-9000). ISO/TS16949 is based on ISO9001:2000, said to be the toughest standard worldwide for suppliers to the auto industry. In addition, compliance with AS9100, the aerospace quality management system, was achieved in September 2006.



ASME U3 Certification and NUK Project
In the Machinery & Engineering Company, ASME (American Society of Mechanical Engineers) U3 certification of the ultra high-pressure vessels used in isostatic presses was granted in June 2004, a first in Asia. In other attempts to upgrade quality, an NUK certification system, meaning "no inspection on arrival", has been introduced to our main suppliers with training and awards offered to individual companies.



A Swift, Flexible Response to Customer Requirements
Timely Provision of Information to Customers
In the Iron & Steel Sector, 2005 saw the launch of a comprehensive database system that facilitates information sharing between production and sales divisions, and a web-type process computer that facilitates information sharing between manufacturing plants and the production control departments, both of which are in the production division. This allows more timely provision of information to customers, as well as the formulation of more streamlined production plans and sales strategies.



Meeting More Diversified Needs
In the Machinery & Engineering Company, one example of the way in which diversified customer requirements are accommodated is the Technical Center located at the Takasago Works. Kobe Steel's industrial machinery, a main product line, has been installed so that customers may have performance tests conducted and assist with development before purchasing the machinery.

In efforts to boost customer satisfaction, a QNet system was set up in September 2005 to allow greater sharing of information about customers' queries and complaints and promptly direct it as feedback for product development. For customers with standard compressors, an energy-saving diagnostic service measures and analyzes electricity consumption while the compressor is in use, and offers an energy-saving strategy or cost-saving suggestions to customers on the basis of the results. Industrial-use compressed air is said to account for 10% of total energy used in Japan. The energy-saving diagnostic service for customers' facilities offers energy-saving proposals.



Customer Support Centers
In the Welding Company, in 2003 a Customer Support Center was established in the Marketing Department as an expanded and upgraded version of the earlier Technical Service Section. The Center works to upgrade customer satisfaction and boost marketing and also provides swift feedback on customer requests and complaints, thereby assisting in better product development and product improvements.
Technical Center at Takasago Works
Technical Center at Takasago Works



Assistance with ISO Compliance
Shinko Research Co., Ltd., offers assistance for achieving compliance with ISO9001 and ISO14001. Experts with many years' experience in this area assist in creating management systems that are both practical and beneficial.


QNet Database
 
QNet Database



Meeting Needs Locally-More Overseas Production
With a policy of "meeting needs locally" the Kobe Steel Group has been actively promoting overseas production since the 1960s. The appropriate technical development and product development for each region or country is promoted based on Kobe Steel's technical development and production technology in Japan.

The Iron & Steel Sector was particularly quick to start production overseas. Construction of wire rod secondary processing facilities in China's Guangdong and Jiangsu provinces was begun in FY2005 in response to strong demand.

The Welding Company is promoting locally based globalization, and recently started construction of a new plant at Kobelco Welding of Europe B.V. in the Netherlands, which manufactures and markets stainless steel flux-cored wire. The new plant will produce carbon steel flux-cored wire, for which demand is expected to grow in shipbuilding and offshore construction.

In the Aluminum & Copper Company, increasingly production overseas is planned to take advantage of location. For example, Kobe Aluminum Automotive Products, LLC was set up in 2003 in Kentucky, USA to manufacture and market forged aluminum parts for car suspensions, and began production began in 2005. In Southeast Asia three companies for copper sheet and strip have been set up to process copper alloys for electronic applications, wide-width coil and other products made at the Chofu Works, to respond quickly and flexibly to growth in demand for their various applications overseas.

In the Machinery & Engineering segment, the Kobe Steel Group's wholly owned subsidiary Kobelco Compressors Manufacturing (Shanghai) Corporation was established in Shanghai, China in February 2005, and the company began full-scale production in June. Furthermore, in February 2006 Kobe Steel upped its equity stake in the California company Engineering Designs Transfer, Inc. (EDTI) from 50.0% to 92.5%, to form Kobelco EDTI Compressors, Inc., the first Group company to manufacture and sell non-standard screw compressors in the United States. In this way, Group companies are responding through overseas ventures to meet growing demand and diversified needs for compressors outside Japan.



Secondary wire rod processing plant in Guangdong, China
KOBE ALUMINUM AUTOMOTIVE PRODUCTS LLC
Kobe Aluminum Automotive Products in Kentucky, USA



Materials Procurement Policy
Kobe Steel undertook a complete revision of its purchasing rules for all Group companies in FY2004 to ensure it meets social obligations for environmental protection and stricter compliance requirement.

Purchasing rules state that purchasing activities must be sensitive to relevant social developments and requirements, and must take into consideration environmental protection and conservation of resources. Where quality is unlikely to be compromised, efforts should be made to procure products that have minimal environmental impact, such as recycled materials. Kobelco Green Procurement Guidelines are applied to the purchase of paper and other stationery products.

In the European Union (EU) the Restrictions on Hazardous Substances (RoHS) Directive came into force in July, 2006. The Kobe Steel Group operates worldwide and has acted to prohibit use of products incorporating the six substances whose use is restricted: lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE).



Correct Exporting
Kobe Steel is striving to ensure that exporting is carried out responsibly. Rules for the Security Export Control Program (Shinko Program) have been formulated and exporting is carried out in accordance with these rules.

Based on the rules, restrictions on products that may be used for military purposes must be strictly observed, and strict in-house controls apply. Additionally, customers' purposes are checked in accordance with the catch-all system* introduced in April 2004. Staff training is also part of an ongoing effort to foster constant awareness of events on the international stage.


* Catch-all system: Exports of all commodities and technologies are subject to restrictions if they are known to be used, for example, in the development of weapons of mass destruction, or if notification has been received from government authorities.



Examples of Quality Assurance Measures of Group Companies
Group company Quality Assurance Measure
Kobelco Logistics, Ltd. For major customers, goods are double-checked for quality before shipping. Also, a safe delivery system has been introduced together with shippers, to prevent products from being dropped, etc., during transportation.
Hanshin Yosetsu Kizai Co., Ltd. Inspections are made at manufacturers to determine whether any of the toxic materials whose use the welding companies have prohibited, are used in wrapping materials such as flexible containers, cans and paper bags. If found, requests are made to terminate their use.
Kobelco & Materials Copper Tube, Ltd. Regarding cladded copper tube used in construction applications, we were number one in the Kanto region to achieve compliance with New JIS (JIS H3330). Quality assurance and quality control measures in line with the new JIS standards are being speedily implemented.
Shinko Fab Tech, Ltd. Plants for processing aluminum and aluminum-alloy sheet, bar and extrusions are compliant with the relevant JIS standards H4040, H4080 and H4100. Quality assurance and quality control measures in line with new JIS standards are being implemented.
Kobelco Compressors Corporation In an effort to reduce the high level of electricity consumption by air compressors, suggestions are offered to our customers on how to save energy. Through examining the operating conditions of air compressors in use by our customers and proposing optimal operation, a total of approximately 290 million kWh of electricity has been saved annually.
Kobelco Eco-Solutions Co., Ltd. Taking the customer's point of view, we have created a service unit for each product line we install to provide thorough after-care service, covering routine checks and maintenance, maintenance management, evaluation and upgrading recommendations. We also collect data on customer satisfaction and work to upgrade and improve product quality.
Kobelco Construction Machinery Co., Ltd. The quality assurance function has been placed directly within the head office organization. Kobelco is striving to improve customer satisfaction by providing a user follow-up system through five domestic marketing companies and designated service plants and by setting up service contacts, available 24 hours a day and 365 days a year.