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Kobe Steel unveils Medium- to Long-Term Business Vision:

Creating New Value, Aiming for Global Growth

April 14, 2010

TOKYO, April 14, 2010 - Kobe Steel, Ltd. unveiled today its Medium- to Long-Term Business Vision for the Kobe Steel Group.

I. Introduction

The Kobe Steel Group steadily expanded its business through the Fiscal 2006-2008 Medium-Term Business Plan, pursuing stability and growth.

Kobe Steel was to implement a new medium-term business plan in fiscal 2009. However, due to the sharp deterioration of the world economy last year, work on the plan was halted. Kobe Steel has now formulated a Medium- to Long-Term Business Vision taking into account that the economy is on a gradual recovery trend.

The new Medium- to Long-Term Business Vision provides the framework for the Kobe Steel Group for the next five to ten years. By further integrating the knowledge and technologies of its diverse businesses in materials and machinery, Kobe Steel aims to become a corporate group that:

header Has a presence in the global market
header Maintains a stable profit structure and a strong financial foundation.
header Prospers together with its shareholders, business partners, employees and society

In this Vision, Kobe Steel aims to achieve consolidated sales of 3 trillion yen and ordinary income of 200 billion yen. Actively promoting its global business, Kobe Steel envisages that overseas sales will comprise 50 percent of total consolidated sales.

II. Basic Policy

1. Thorough pursuit of High-End "Only One" Products, Technologies & Services

(1) Focus on improving the market position of current high-end "Only One" products, technologies and services in the market and improving their profitability, as well as create new Only One products.
(2) Supply customers with services that only Kobe Steel can provide. Improve customer satisfaction by offering better after-sales services; determining and meeting customers' changing needs; and providing better products and technologies. Actively pursue upstream as well as downstream aspects of the current business to dramatically improve added value to our businesses by keeping in step with customer and societal needs.

2. Further improve manufacturing strengths

(1) "Monozukuri-ryoku," namely our manufacturing strengths, is the source of the competitiveness of the Kobe Steel Group. "Monozukuri" (or manufacturing excellence) in the Kobe Steel Group is a total activity that covers sales and marketing, development and design, procurement, and manufacturing. Monozukuri enables us to implement one of our corporate philosophies: providing "reliable and advanced technologies, products and services that satisfy customers." Linked to improving profitability, monozukuri is carried out by the entire Kobe Steel Group.
(2) Monozukuri-ryoku is the strength that provides reliable and advanced technologies, products and services eternally. Monozukuri-ryoku is also an engine for growth.
(3) Kobe Steel established the MONODZUKURI (Production System Innovation) Planning and Promotion Department on April 1. The mission of this department is to reduce costs and improve productivity by deepening cooperation among the company's various businesses and to determine medium- to long-term issues that need to be addressed.

3. Growth and Business Expansion (Globalization and Role of Domestic Operations)

(1) Approach to the global market

Expand overseas business appropriate to each area, pursuing regions and fields where demand is growing, particularly developing countries.
(2) Approach to Growth Fields

Strengthen products made in our domestic "mother" factories by creating proprietary value-added products, which are highly regarded by customers and cannot be followed by competitors, utilizing our development and technological capabilities in Japan. Accelerate business undertakings in growth areas in Japan and overseas.

4. Demonstrating the Comprehensive capabilities of the Kobe Steel Group

(1) Integrate Diverse Technologies

With "barrier-free" thinking as a key concept, lower organizational barriers and improve the flow of communication to further amass and integrate expertise, ideas and know-how in order to create new value. In addition to improving comprehensive technological capabilities and proposal capabilities, we aim to create new high-end Only One products, technologies and services through the integration of our technologies.
(2) Popularize the KOBELCO brand

To popularize the KOBELCO brand, Kobe Steel aims to flexibly publicize the brand name region by region, as well as share the KOBELCO brand within the Kobe Steel Group and supply products and services that only the Kobe Steel Group can provide.
(3) Nurture the Human Resources of the Kobe Steel Group

In a rapidly changing business environment, systematically nurture employees that can strengthen the business foundation of the Group, implement change, and promote global business development.

5. Contributions to Society

(1) Build an organizational structure that has "high sensitivity"

Build a corporate culture for the entire Kobe Steel Group that is highly sensitive to compliance.
(2) Carry out Social Corporate Responsibility (CSR)

Actively fulfill our social responsibility centered on contributing to local communities and environmental conservation. Contribute to global warming solutions through business activities.

III. Concrete Measures for Business Units

1. Iron & Steel Business

(1) Steadily meet growing demand centered on developing countries (China and India).
(2) Expand the market for high-end Only One steel products including high strength steel and specialty steel.
(3) Consider application of direct reduced iron in steel operations.

2. Welding Business

(1) Pursue sustained growth and profits centered on providing solutions to customers.
    (Combining welding consumables, welding technologies and welding robot systems)
(2) Expand business at current overseas locations and strengthen overseas business in developing countries.

3. Aluminum & Copper Business

(1) Expand overseas business including the establishment of new locations and utilization of alliances.
    (See Kobe Steel to set up aluminum forged parts company in China on new aluminum forging plant in China.)

(2) Strengthen and upgrade high-end Only One products (automotive, IT and energy fields).

4. Machinery Business

(1) Strengthen the production technology capabilities at domestic "mother factories" and expand production at overseas locations.
(2) Create and expand sales of environmentally-conscious high-end Only One products (SteamStar, next-generation heat pump, etc.).

5. Natural Resources & Engineering Business

(1) Actively promote direct reduced iron, centered on the ITmk3® Process.
    (See World's first commercial ITmk3® plant successfully begins production.)

(2) Promote the commercialization of the Upgraded Brown Coal (UBC) Process and build a business model for the Process.

6. Kobelco Eco-Solutions

(1) Strengthen profitability by expanding proposal-based business (services and maintenance)
(2) Advance into and expand sales in overseas markets (Vietnam, India, etc.)

7. Kobelco Construction Machinery

(1) Expand business in developing countries (China, Thailand, India, etc.)
(2) Develop products that meet local needs, incorporating advanced technologies such as low fuel consumption and low noise.

8. Kobelco Cranes

(1) Improve the value of the KOBELCO brand by strengthening monozukuri (manufacturing excellence) and service capabilities.
(2) Establish strategic overseas locations.


References to forecasts are based on currently available information as of today. Actual business results may differ due to various changeable conditions in the future.