Kobe Steel Plan Expenditure to Increase Steelmaking Capacity and Efficiency

Kobe Steel, Ltd. plans to make major capital investments in its steelmaking facilities to increase its competitiveness in distinctive, value-added products.

Plans call for the construction of a new continuous bloom caster at Kobe Works in Kobe, Hyogo Prefecture to increase the productivity of specialty steels. With a production capacity of 720,000 metric tons per year, the new caster is scheduled to go into operation in September 2006. Capital investment is anticipated to be 8.5 billion yen, including remodeling of the building and related work.

Kobe Steel has also begun a detailed study on relining Kobe Works' No. 3 blast furnace, which is currently in operation. The relined blast furnace is anticipated to go into operation in fiscal 2007.

At Kakogawa Works, also in Hyogo Prefecture, Kobe Steel plans to bring back into service the No. 2 blast furnace, after blowing out the No. 1 blast furnace. The No. 2 blast furnace will be rebuilt to have an inner volume of about 5,400 cubic meters. Work is to be completed by March 2007. The No. 3 blast furnace will remain in operation. Capital expenditure is expected to reach 40 billion yen, which includes remodeling the old No. 2 blast furnace and installing new equipment. The remodeled No. 2 blast furnace will be blown in, based on the condition of the No. 1 blast furnace, which has been in operation since January 1988.

In addition to improving business earnings by strengthening the supply of distinctive, high-quality steel products, these strategic investments will increase the cost competitiveness over the medium- to long-term future as blast furnaces need to be rebuilt about once every 20 years. Kobe Steel intends to carry out these strategic projects, which will improve the business earnings, or flow, of its distinctive, high-quality steel products.

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