The joint venture, Kobe CH Wire (Thailand) Co., Ltd., will be established in September 1997. Kobe CH Wire will supply CHQ (cold heading quality) wire, a high-end product, to Thai-based Japanese makers of nuts and bolts, called fasteners. For Mahajak Autoparts, the venture will allow it to improve the quality of its fastener products.

Kobe CH Wire will be capitalized at 56 million bahts (200 million yen) and will have roughly 35 employees. It will be 33% owned by Kobe Steel; 25% by Shinsho, a Kobe Steel subsidiary; and 20% by Mahajak Autoparts. Japanese steel wire processor O&K and the trading firm Nissho Iwai will each have an 11% share.

Start up of operations at Kobe CH Wire is targeted for October. A 2,400-square- meter production facility with a capacity of 1,500 metric tons per month will be located in Nongjok, Bangkok. The venture will have pickling equipment, three wire drawing machines and two annealing furnaces. Kobe Steel will supply the wire rod to the venture.

The joint venture will also study the construction of a new plant in line with future growth in the market.

"As the premier producer of wire rod, our move into wire processing in Thailand is a further commitment to fastener makers," said Ryuji Higashi, a managing director of Kobe Steel. "Local processing of materials and parts manufacturing will contribute ultimately to strengthening the automotive industry in Thailand," he said.

Wire rod is produced by steelmakers who furnish the material to secondary processors. Secondary processors cold draw the wire rod through dies and treat it to improve strength and toughness. The processed wire is then supplied to fastener makers which turn the material into nuts and bolts. However in Thailand, few secondary processors can handle CHQ wire for use in auto parts. Most of the processed wire for Japanese fastener makers in Thailand is shipped from Japan.

Roughly 590,000 cars were made in Thailand in 1996. In 2000, auto production capacity is estimated to increase to the 1.2-million-unit level. In this market, Japanese auto manufacturers have located plants, creating demand for high quality parts that can be sourced locally. In response, major Japanese fastener makers have entered the Thai market, creating a corresponding need for processed wire products.

Background Information

Mahajak Autoparts Co., Ltd. Mahajak Autoparts produces fasteners, as well as hot and cold forged steel products for the auto industry. Established in 1989 in Bangkok, Thailand, Mahajak Autoparts has approximately 700 employees. The president is Chavalit Kanchanachayphoom.

O&K Co., Ltd. O&K is an Osaka (Japan)-based steel wire processor established in 1925. The company has about 145 employees, and the president is Takao Oku.

Kobe Steel, Ltd. A diversified corporation, Kobe Steel is a major Japanese integrated steelmaker regarded as the world's top producer of steel wire rod. It excels in specialty wire rod for automotive applications.

Kobe Steel is also a leading supplier of aluminum and copper products, industrial and construction machinery, and plant and engineering services. Other businesses include electronics, information systems and robotics. Founded in 1905, Kobe Steel had employees of 13,437 for the year ended March 1997. The president is Masahiro Kumamoto.

# # #
For more information, please contact:
Gary Tsuchida
Tokyo, Japan
tel +81-3-3218-6055
e-mail www-admin@kobelco.co.jp

Takashi Yamada
Bangkok Representative Office
Kobe Steel Asia Pte Ltd
Bangkok, Thailand
tel +66-2-676-5543
fax +66-2-676-5542

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