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Message from the President

The Kobe Steel Group is growing toward the future, through manufacturing that contributes to the environment and society.

One hundred ten years have passed since our founding in 1905. Over these years, the Kobe Steel Group has been supporting lifestyles, industry and society through monozukuri (or manufacturing) in a variety of fields.

The Kobe Steel Group is now using its innovative products and technologies to help solve the difficult issues of our times. It aims to achieve new growth through monozukuri that contributes to the environment and society.

This year's message from Kobe Steel President and CEO Hiroya Kawasaki discusses the Group's medium- to long-term business vision and CSR activities as they relate to those issues.

Covering a broad range of sectors, centered on materials and machinery, we pursue business activities that contribute to the environment and society.

The Kobe Steel Group's businesses focus on materials sectors such as steel, welding, aluminum and copper, and machinery sectors such as industrial machinery, construction machinery, engineering and environmental solutions. In addition, the Group also operates a wide range of other businesses, including wholesale power supply and real estate. Through the products and technologies developed in these businesses, the Kobe Steel Group helps to create foundations for modern lifestyles and industry.

The Group also features an impressive range of products and technologies that help to solve pressing issues of the environment and society, such as the reduction of environmental impact and the need for stable energy supplies. By strengthening manufacturing capabilities in these areas, the Group aims to contribute to the environment and society while pursuing stable operations and further growth.

Through the development of technologies that help protect the environment, we are accelerating growth into the future.

Guided by the KOBELCO VISION"G" medium- to long-term business vision, the Kobe Steel Group is pursuing growth strategies for the future. The second stage of the vision (fiscal 2013-2015)—which aims to build upon the foundation laid down during the first stage (fiscal 2010-2012)—is now in its final year.

During the second stage, we have been focusing on commercializing products and technologies that contribute directly to conservation of the environment. For instance, in response to fuel economy regulations for cars aimed at reducing CO2 emissions, in China we have formed a joint venture to make high-strength steel sheet for lighter weight automobiles and established a base for aluminum body panel manufacturing.

Additionally, we have been working to accelerate automotive lightweighting and contribute to fuel efficiency through multi-material technologies that combine steel, aluminum and welding to achieve both strength and lightness.

We are helping to realize a hydrogen society, through hydrogen fueling stations and fuel cell vehicle technologies.

Fuel cell vehicles (FCVs) have garnered attention as next-generation automobiles that do not emit CO2. The Kobe Steel Group is also contributing to FCV technology, including the field of hydrogen infrastructure, which will be necessary in order to popularize FCVs. The Group has developed a lower-cost, compact hydrogen compressor package that combines ultrahigh pressure hydrogen compression, cooling and storage features.

In addition, the Mirai FCV released by Toyota Motor Corporation utilizes Kobe Steel's titanium and aluminum materials. The Kobe Steel Group is utilizing its technological strengths to its fullest to more quickly usher in a hydrogen society.

As part of our aim to be corporate citizens who exist in harmony with the community, we are pursuing the KOBELCO GREEN PROJECT.

In addition to contributing to the environment and society directly through our business operations, the Kobe Steel Group also aims to contribute to society as a corporate citizen with deep roots in the communities where its plants and offices are found.

Through the KOBELCO GREEN PROJECT, the Group carries out forest maintenance activities in Hyogo Prefecture, Osaka Prefecture and elsewhere. We also implemented the KOBELCO Forest Fairy Tale Prize, which collects stories from elementary, middle and high school students on forest themes and turns them into picture books. This year marks the prize's third year.

In addition, we carry out other activities as a community-spirited corporate group, including local cleanup drives and community events in areas where our plants and offices are located, and educational visits to elementary schools and children's facilities.

We believe safety and disaster prevention, environmental consideration and compliance are the responsibility of every employee.

This year marks the 20th anniversary of the Great Hanshin-Awaji Earthquake. Like many others, the Kobe Steel Group suffered significant damage during this disaster. The lessons we learned that day on safety and disaster prevention still remain paramount to our company. Together with the issues of environmental consideration and compliance, these lessons form the foundation of our operations and we believe thorough attention to such matters is the responsibility of all employees. When each and every employee addresses issues of safety, the environment and compliance as matters of personal responsibility, the Kobe Steel Group is able to grow as a corporation deserving its stakeholders' trust.

I hope this report will help you learn more about the ways in which our activities contribute to the environment and society.

Hiroya Kawasaki

Hiroya Kawasaki
President , CEO and Representative Director
Kobe Steel, Ltd.

Kobe Steel Group Corporate Philosophy

1.

We provide reliable and advanced technologies, products and services that satisfy customers.

2.

We support each employee in developing his or her abilities, while respecting mutual cooperation within the Kobe Steel Group.

3.

Through continuous efforts for innovative change, we aim to enhance our corporate values.

The Kobe Steel Group is dedicated to meeting society's needs by sharpening its technical capabilities and skills while offering superior products and services. We also believe in working toward a common goal while remaining mindful of personal respect and Group harmony. Through the support of all those involved, we have worked to develop society and achieve happiness for hard-working citizens. In light of the turbulent business environment faced by companies in this day and age, we believe that a swift and appropriate response to change, made with a challenging spirit, is more important than ever.

These beliefs are reflected in the corporate philosophy above. As always, we will strive to develop hand-in-hand with society with employees who share in our corporate values.