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Kobe Steel to make capital investments at steelworks

Hot-metal treatment and plate heat treatment capacities to be enhanced

December 8, 2011

TOKYO, December 8, 2011 - Kobe Steel, Ltd. plans to make capital investments of approximately 36 billion yen to enhance the hot-metal treatment capacity at its Kakogawa Works and Kobe Works and the heat treatment capacity for steel plate at the Kakogawa Works to strengthen the competitiveness of the company's steel facilities.

These investments will support Kobe Steel's Iron & Steel segment in increasing its sales of "Only One" high-end products to comprise 50% of segment sales by fiscal 2015.

High-end steel products, such as automotive high-strength steel sheet, steel cord and bearing steel, require a high degree of cleanliness, compared with steel for general use. Hot-metal treatment is necessary to reduce the amount of sulfur and phosphorus in the molten iron. The hot-metal treatment plant will be constructed between the blast furnace, which makes pig iron, and the basic oxygen furnace plant, which turns the iron into steel.

In the coming years, steel plate for the energy industry is one of the products in which Kobe Steel intends to expand sales. Steel plate is used in tanks, pressure vessels and line pipes. For these applications, the steel needs to be desulfurized and dephosphorized. After rolling, the steel must undergo heat treatment. A heat treatment furnace will be installed after the plate mill in Kakogawa Works.

Through these capital investments, Kobe Steel will be able to greatly increase its hot-metal treatment capacity and heat treatment capacity for steel plate. The improvements will strengthen Kobe Steel's production system at its steelworks and contribute to expanding sales of high-end steel products.

The higher hot-metal treatment capacity will also lower costs. By increasing the reaction efficiency during desulfurization and dephosphorization, the amount of lime and other auxiliary materials is substantially reduced and yield is improved. As low-grade raw materials containing comparatively large amounts of sulfur and phosphorus can be used in larger quantities, the two steelworks will be able to save as much as 10 billion yen annually.

Details of the capital investments follow below:

Kakogawa Works - New hot-metal treatment plant

Total investment:	30 billion yen
Start-up:	End of June 2014
Main equipment:	Desulfurization equipment - 2 units Dephosphurization furnace - 1 unit
Outline:	A new hot-metal treatment plant will be constructed, and desulfurization equipment and a dephosphurization furnace will be installed. Independent treatment using separate equipment will promote highly efficient processing. This investment will enable all the molten iron to be desulfurized and dephosphorized.

Kobe Works - New hot-metal treatment equipment

Total investment:	2 billion yen
Start-up:	End of October 2012
Main equipment:	Desiliconization and desulfurization equipment - 1 unit
Outline:	New desiliconization and desulfurization equipment will be installed. The existing hot-metal treatment furnace will be used only for dephosphurization. In the same way as Kakogawa, independent treatment using separate equipment will enable highly efficient processing.

Kakogawa Works - New continuous heat treatment furnace for steel plate

Total investment:	4 billion yen
Start-up:	End of December 2012
Main equipment:	Continuous heat treatment furnace - 1 unit
Outline:	A new heat treatment furnace will be installed to double heat treatment capacity. This investment will improve the production system and help expand sales of "Only One" high-end steel plate for the energy industry.