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Kobe Steel's China headquarters to hold opening ceremony

May 26, 2011

Kobe Steel, Ltd. announces that its China headquarters, Kobelco (China) Holding Co., Ltd., will hold an opening ceremony at 6:00 pm today in Shanghai.

Kobe Steel's Executive Vice President Hiroaki Fujiwara, Senior Officer Hiroya Kawasaki and about 200 guests are anticipated to attend the event.

Kobelco (China) Holding is the first headquarters established in China by a Japanese blast furnace steelmaker.  The company has been operating since April.  Its first investment project was equity participation in Wuxi Compressor Co., Ltd., announced last week.

Based in Luwan District, Shanghai, the wholly owned subsidiary of Kobe Steel is capitalized at US$50.14 million.  With this amount of registered capital, the company is able to make direct investments in China.

The main activities of the China headquarters are investments, mergers and acquisitions; centralized financing and cash management; strengthening group governance and risk management; and supporting group companies in China.

Kobelco (China) Holding has 11 employees.  The company was established in January.  The chairman of Kobelco (China) Holding is Hiroya Kawasaki, who concurrently is a Senior Officer at Kobe Steel.  The president is Hiroshi Umeda.

The Kobe Steel Group in April 2010 launched its Medium- to Long-Term Vision, KOBELCO VISION "G," which aims to achieve consolidated sales of 3 trillion yen and ordinary income (also called pretax recurring profit) of 200 billion yen over the next five to ten years.  Overseas sales are anticipated to make up about half of that amount, or 1.5 trillion yen, supported by active global development mainly in emerging countries.

Business activities in the growing Chinese market are ever more important than before.  Kobe Steel's current sales of 260 billion yen from China, which includes exports from Japan in fiscal 2010, are anticipated to more than double in the future.

In its materials segments, the Kobe Steel Group has three companies in China for steel wire rod processing; three for the production and sales of welding consumables; and one for copper sheet processing.  In the machinery field, Kobe Steel has two units that assemble construction machinery and one that makes standard compressors.

Under KOBELCO VISION "G," Kobe Steel has been accelerating its business development in China.  It has set up a venture for aluminum forgings, increased production of hydraulic excavators and standard compressors, plans to manufacture crawler cranes, and is entering the non-standard compressor business.

In total, Kobe Steel currently has 35 companies in China, of which 16 are consolidated subsidiaries, and employs over 3,000 people.  Each of its locations is anticipated to expand, and Kobe Steel is also considering other new locations.

Kobe Steel's China headquarters was established with the aim of increasing the profitability of the Kobe Steel Group.  The China headquarters plans to centralize financing and cash management, strengthen group governance, support group companies, and promote lateral communication within the Kobe Steel Group in response to the growing Chinese market.

On April 1, Kobe Steel launched a Chinese-language web site (www.kobelco.cn).  The Chinese site introduces Kobe Steel's businesses and products, as well as social contributions in China.  By actively providing information, Kobe Steel intends to increase the recognition of the Kobe Steel Group and raise its corporate value in China.