Kobelco Millcon Steel Becomes Consolidated Subsidiary of Kobe Steel

Kobe Steel, Ltd. announces today that it entered into a share transfer agreement with Millcon Steel Public Company Limited on November 14. Under the agreement, Kobe Steel acquired 25% of the issued shares that Millcon Steel holds in Kobelco Millcon Steel Co., Ltd. (KMS), a production base for wire rods in Thailand, which was established in 2016 as a 50-50 joint venture with Millcon Steel. As a result of the share transfer, KMS has turned into a consolidated subsidiary of Kobe Steel.

As the only manufacturer of special steel wire rods in the ASEAN region, KMS provides high quality products for customers with reduced lead time through local production. KMS manufactures both ordinary steel wire rods and special steel wire rods. While Millcon Steel has been responsible for the supply and sale of electric arc furnace steel billet (base material) for use in the ordinary steel wire rod business, Kobe Steel has been responsible for the supply and sale of blast furnace steel billet (base material) for use in the special steel wire rod business while providing technical support for manufacturing.

Kobe Steel and Millcon Steel have agreed to operate KMS as a consolidated subsidiary of Kobe Steel to further strengthen KMS's special steel wire rod business while maintaining the cooperative framework for KMS.

In the ASEAN region, the automotive production volume is expected to increase centered on Japanese car makers. Through having KMS as a consolidated subsidiary, Kobe Steel aims to realize Groupwide integrated marketing and provide services through comprehensive supply chain management, from wire rods to secondary processed products, so that the company responds to customer needs more effectively.

The KOBELCO Group will continue to provide solutions to the needs of society by making the best use of its technologies and the talents of its employees in order to realize a world in which people, now and in the future, can fulfill their hopes and dreams while enjoying safe, secure, and prosperous lives.

Representative:

CEO Shinichi Yasuki (from Kobe Steel)

Establishment:

February 2016

Location:

Rayong, Thailand

Capital:

2.83 billion Thai Baht (approximately 10.5 billion yen)

Ratio of shareholding:

[Previous] Kobe Steel, Ltd.: 50%    Millcon Steel: 50%
[Current] Kobe Steel, Ltd.: 75%    Millcon Steel: 25%

Production items:

Ordinary steel wire rods and special steel wire rods

Production capacity:

480,000 tons/year