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Kobe Steel's aluminum forging plant in China begins production

August 22, 2012

TOKYO, August 22, 2012 - Kobe Steel, Ltd. announces that the first-phase construction of the aluminum forging plant at Kobe Aluminum Automotive Products (China) Co., Ltd. (or KAAP China) has been completed and the facility has gone into commercial production. A joint venture of Kobe Steel, Mitsui & Co., Ltd. and Toyota Tsusho Corporation, KAAP China produces aluminum forgings for automotive suspensions in Suzhou, Jiangsu Province, China.

KAAP China is currently undertaking a second-phase expansion. When construction is completed in March 2013, production capacity is anticipated to double and upstream operations will also commence. First-phase construction amounted to 2.5 billion yen and the second phase will come to 4.5 billion yen. In total, KAAP China is investing approximately 7 billion yen.

In addition to the anticipated growth of automobile manufacturing in China, there is also a rising need for lighter vehicles to meet stricter fuel consumption regulations. As a result, demand for aluminum suspensions in China is rapidly increasing, mainly from Japanese, American and European carmakers.

On this background, KAAP China has started up its forging press and heat treatment equipment. With demand growing, the company has been steadily gaining orders and decided in December 2011 to further expand production capacity. The second-phase investment, to be completed in March 2013, will add an additional forging press and heat treatment equipment, as well as melting and casting operations.

Kobe Steel produces aluminum forgings for automotive suspensions at its Daian Plant in Inabe, Mie Prefecture, Japan and at subsidiary Kobe Aluminum Automotive Products, LLC in Bowling Green, Kentucky, USA. The start-up of KAAP China has enabled Kobe Steel to establish a production network in three locations: Japan, China and the United States. Kobe Steel plans to meet the global needs of automakers for lighter cars through this network.

Capital Investment

Major equipment:

Phase 1

:6,300-metric-ton mechanical forging press - 1 unit
 Heat treatment equipment - 1 unit

Phase 2

:6,300-metric-ton mechanical forging press - 1 unit
 Heat treatment equipment - 1 unit
 Melting furnace, casting line, billet processing line

Profile of Kobe Aluminum Automotive Products (China) Co., Ltd. (at the end of July 2012)

Location

:Suzhou New District, Suzhou, Jiangsu Province, China

Established

:September 2010

President

:Yuji Numabe

Employees

:About 50

Capital

:1 billion yen

Equity share

:Kobe Steel 60%, Mitsui & Co., Ltd. 25%, Toyota Tsusho Corporation 15%