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Kobe Steel Group opens new compressor plant in Shanghai

May 13, 2008

TOKYO, May 13, 2008 - Kobe Steel, Ltd. announces the opening of the new compressor plant of subsidiary Kobelco Compressors Manufacturing (Shanghai) Corporation (or KCMS) in Shanghai, China.

KCMS relocated its operations to the northern part of Shanghai's Jiading Industrial Zone, about 15 kilometers northwest of its former facility. The new plant continues the manufacturing operations, as well as continues to employ the workers of the previous facility.

A ceremony marking the start of full operations was held today, attended by Chinese government officials and Consul-General Yuji Kumamaru of the Japanese consulate in Shanghai.

In April 2005, KCMS began manufacturing standard compressors in the southern part of the Jiading Industrial Zone in northwestern Shanghai. However, Shanghai decided to implement the Jiading New Town Plan, which involved the moving of dozens of Japanese companies in the area. In response to the Chinese government's request to relocate, KCMS moved to the northern part of the district with the guidance and support of the Consulate-General of Japan in Shanghai and JETRO Shanghai.

KCMS began marketing the energy-efficient Kobelion II series of oil-flooded standard compressors in 2007 in China first, ahead of the Japanese market. The compressors are noted for having one of the world's highest levels of discharged air volume and energy efficiency. Orders for these compressors have been growing. Users have given high marks to the Kobelion II series and with an expanded number of distributors, orders from Japanese affiliates and local companies in China have risen. With higher sales volume, the Kobelion II series is contributing to higher profits at KCMS.

In comparison to the previous facility, the new plant has a larger floor space, cranes with higher lifting capacity, and a larger power source for trial compressor operation. The new plant is also equipped to manufacture large oil-free screw compressors with motor outputs up to 400 kW.

Demand for compressors in China has been increasing yearly and is forecast to continue growing in the coming years. As a result, KCMS, which originally anticipated producing roughly 1,500 compressors a year, plans to double production to 3,000 units per year in several years time. KCMS intends to steadily increase the sales volume of its compressors to meet the growing market in China.

Main Attendees of Opening Ceremony
Jiading District:   Sun Ji Wei, Governor
Zhuang Mu Di, Vice Governor
Consulate-General of Japan in Shanghai:   Consul-General Yuji Kumamaru
Kobe Steel, Ltd.:   Shuzo Mohri, Senior Officer, Kobe Steel & General Manager of the Compressor Division

Company Profile
Name:   Kobelco Compressors Manufacturing (Shanghai) Corporation
Location:   Jiading Industrial Zone, Shanghai, China
Capital:   US$5 million
Equity share:   75% Kobe Steel, Ltd.
25% Kobelco Compressors Corporation (a Kobe Steel subsidiary)
Established:   February 2004
Start-up:   April 2005
Product:   Standard compressors
Chairman:   Shuzo Mohri, Senior Officer, Kobe Steel, Ltd. & General Manager, Compressor Division
President:   Hiroki Iwamoto
Employees:   51

About Kobe Steel
Kobe Steel, Ltd. manufactures screw, centrifugal and reciprocating compressors - the only company in the world that produces all three types of compressors. One of the top suppliers of screw compressors, Kobe Steel leads the industry with its outstanding technical expertise.

In addition to a wide array of industrial machinery and engineering services, Kobe Steel is one of Japan's leading steelmakers and producers of aluminum and copper products. Other businesses include welding consumables, wholesale power supply, construction machinery, real estate, and electronic materials. For more information on Kobe Steel, please visit: www.kobelco.com