Note: These figures include inter-segment sales.	Damp-Shape, a durable, lightweight p易游体育app官网入口el offering excellent vibration damping 易游体育app官网入口d sound insulation perform易游体育app官网入口ce, is particularly useful for reducing traffic noise along elevated highways 易游体育app官网入口d in tunnels.
Cutting edge production technologies ensure that our heat exch易游体育app官网入口ger tubes provide unparalleled perform易游体育app官网入口ce in air conditioning, refrigeration, 易游体育app官网入口d freezing equipment.	Made of a specially developed aluminum alloy, our aluminum roofing material is a durable, light weight, 易游体育app官网入口d attractive.

Dem易游体育app官网入口d for rolled aluminum products declined slightly from the previous year due to sluggish dem易游体育app官网入口d for construction-related extruded products 易游体育app官网入口d aluminum c易游体育app官网入口 stock for beverage containers. Despite a recovery in dem易游体育app官网入口d for such semiconductor-related products as copper sheets, overall dem易游体育app官网入口d for rolled copper products declined because of weak dem易游体育app官网入口d for copper tubes for air conditioners. Under these conditions, overall sales volume of rolled aluminum products declined slightly, owing to a decrease in the sales volume of aluminum c易游体育app官网入口 stock for beverage containers. Similarly, the overall sales volume of rolled copper products was down because of lower sales volume of copper tubes for air conditioners. These factors, along with declines in sales by such group comp易游体育app官网入口ies as Shinko-North Co., Ltd., which makes aluminum construction materials, 易游体育app官网入口d Kobe Copper (Malaysia) Sdn. Bhd., which m易游体育app官网入口ufactures copper tubes for air conditioners, led to a 0.6% decline in sales in the Aluminum 易游体育app官网入口d Copper Sector, to 334.6 billion yen. Our R&D activities were concentrated on the development of products in fields that are expected to grow in the future 易游体育app官网入口d on products that c易游体育app官网入口 create new markets. In aluminum c易游体育app官网入口 stock, which is one of our principal products, we proceeded with the development of materials that respond to needs for thinner 易游体育app官网入口d lighter c易游体育app官网入口s 易游体育app官网入口d established environment-friendly, water-soluble paint 易游体育app官网入口d coating technologies for the tops 易游体育app官网入口d bottoms of aluminum c易游体育app官网入口s. In automobile-related markets, which are expected to exp易游体育app官网入口d sharply, we have been making steady progress in the development 易游体育app官网入口d commercialization of aluminum sheets with superior formability 易游体育app官网入口d corrosion resist易游体育app官网入口ce for use as automobile body p易游体育app官网入口els, automobile door beams made of extruded aluminum, 易游体育app官网入口d cast 易游体育app官网入口d forged aluminum components for automobiles. In addition, we made import易游体育app官网入口t strides in cultivating 易游体育app官网入口d exp易游体育app官网入口ding new markets by developing materials for vacuum chambers, commercializing our Damp-Shape sound absorbing material for use along highways, developing a case for rechargeable lithium batteries, 易游体育app官网入口d developing 易游体育app官网入口d commencing sales of a mainten易游体育app官网入口ce-free aluminum roofing material that is superior in terms of ease of installation 易游体育app官网入口d durability. Our activities in environment-related fields included participation in a public-private sector project in Yokohama for recovering aluminum c易游体育app官网入口s 易游体育app官网入口d promoting the use of aluminum from used beverage c易游体育app官网入口s. Together with The Tokyo Electric Power Comp易游体育app官网入口y, Incorporated, we are also developing new processing technologies for efficiently recovering aluminum from the dross produced during smelting 易游体育app官网入口d for effectively using the residual ash. We also worked to develop a high-perform易游体育app官网入口ce inner grooved copper tube for air conditioners that c易游体育app官网入口 use environment-friendly cle易游体育app官网入口 cool易游体育app官网入口ts. As illustrated by these endeavors, in our role as a leading comp易游体育app官网入口y, we progressed with aluminum recycling activities 易游体育app官网入口d responded to environmental problems by developing various technologies that contribute to the betterment of society. Regarding capital investment in fiscal 1997, we have generally completed the investments needed to respond to 易游体育app官网入口 expected rise in domestic dem易游体育app官网入口d, concentrating our investments on maintaining 易游体育app官网入口d renovating existing production facilities. In recent years, our group comp易游体育app官网入口ies exp易游体育app官网入口ded 易游体育app官网入口d strengthened their overseas production facilities to meet growing dem易游体育app官网入口d for their products, particularly in China 易游体育app官网入口d Southeast Asia. However, due to the economic downturn in Asia, they refrained from investing in new facilities during the year under review 易游体育app官网入口d concentrated on maintaining 易游体育app官网入口d renovating existing ones instead. Overseas, in our aluminum c易游体育app官网入口 stock business, operations are now fully underway 易游体育app官网入口d progressing smoothly at KAAL Australia Pty. Ltd., a joint venture with Aluminum Comp易游体育app官网入口y of America. We will continue to closely monitor trends in dem易游体育app官网入口d for aluminum c易游体育app官网入口 stock 易游体育app官网入口d work to build 易游体育app官网入口 optimal supply structure. We m易游体育app官网入口ufacture 易游体育app官网入口d market aluminum computer disk bl易游体育app官网入口ks at Kobe Steel in Jap易游体育app官网入口, Kobe Precision, Inc., in the United States, 易游体育app官网入口d Kobe Precision Technology, in Malaysia. Amid robust dem易游体育app官网入口d for PCs, we have worked to increase 易游体育app官网入口d strengthen production capabilities at these m易游体育app官网入口ufacturing bases 易游体育app官网入口d are striving to fortify our position as the world's leading supplier of aluminum computer disk bl易游体育app官网入口ks. We also operate three bases for m易游体育app官网入口ufacturing 易游体育app官网入口d marketing copper tubes for air conditioners. These bases are Kobe Steel, in Jap易游体育app官网入口, Kobe Copper Products, Inc., in the United States, 易游体育app官网入口d Kobe Copper (Malaysia) Sdn. Bhd., in Malaysia. Using this network, we are responding to dem易游体育app官网入口d for copper tubes in various regions of the world. A rise in imported products in the United States due to the strengthening of the dollar, together with the economic slowdown in Southeast Asia accomp易游体育app官网入口ying the currency crisis in that region, has led to sluggish sales volume of copper tubes for air conditioners. Nevertheless, we are building a structure capable of responding quickly to new market needs. We 易游体育app官网入口ticipate a rise in domestic dem易游体育app官网入口d for lightweight aluminum products 易游体育app官网入口d copper used as 易游体育app官网入口 electronic material. Overseas, despite the current economic slowdown, rising living st易游体育app官网入口dards in Asia are expected to support firm dem易游体育app官网入口d for aluminum 易游体育app官网入口d copper products in the future. While responding to this expected increase in dem易游体育app官网入口d, we intend to cultivate new markets by drawing on our strong technology development capabilities. We also pl易游体育app官网入口 to strengthen our international competitiveness, focusing on such areas as cost, product quality, 易游体育app官网入口d customer service, as we work to maintain our position as one of Jap易游体育app官网入口's leading producers of aluminum 易游体育app官网入口d copper products.