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Kobe steel to establish welding company in China

Marketing welding products and welding robot systems

December 10, 2009

TOKYO, December 10, 2009 - Kobe Steel, Ltd. announces that it plans to establish a company in Shanghai, China, to market its welding products and welding robot systems in that country. The new company, to be called Kobe Welding of Shanghai Co., Ltd. (or KWSH), is anticipated to be established in March 2010.

Plans call for KWSH to be capitalized at US$800,000. The company, which will be wholly owned by Kobe Steel, will have 11 employees. KWSH will market welding consumables and welding robot systems and related parts in China. It will also provide maintenance services for the robot systems.

In China's energy field, demand has been active for petroleum tanks, spherical tanks and LNG terminals in recent years. Energy-related projects are anticipated to increase sharply in the future. For Kobe Steel's welding consumable business, it is essential to be close to its users, in order to meet demand for value-added welding consumables heavily used in the energy field.

In the welding robot systems business, Kobe Steel, which excels in robot systems for welding medium steel plate, has been supplying welding systems to construction equipment manufacturers in China. Demand has been growing for construction machinery, particularly for hydraulic excavators. There is a great need for better after-sales services to customers. In the future, demand for construction machinery in China is expected to continue being firm, and customers are requiring better maintenance and an improved parts supply network.

Kobe Steel decided to establish KWSH to improve marketing, reinforce customer relations, and strengthen its sales capabilities in China.

Kobe Steel already has two other subsidiaries in China. Kobe Welding of Tangshan Co., Ltd., in Tangshan, Hebei Province, manufactures solid welding wire. Kobe Welding of Qingdao Co., Ltd. in Shangdong Province makes flux cored welding wire for carbon steel. KWSH's welding products and welding robot systems will add to Kobe Steel's offerings of distinctive products and further increase its presence in China.