Note: YY易游平台ese figures include inter-segment sales.
Aluminum is increasingly being used by automobile manufacturers amid growing concern and awareness about environmental and recycling problems. YY易游平台ere are high hopes for YY易游平台e development of an aluminum vehicle.
Cutting edge production technologies and a renowned quality assurance system combine to ensure YY易游平台at our heat exchanger tubes provide unparalleled performance.	Glass substrates for hard disks are growing in popularity because YY易游平台ey can store more data YY易游平台an aluminum substrates.

Demand for rolled aluminum and copper products was sluggish, reflecting slack demand for aluminum can stock for beverage containers due to unseasonable summer weaYY易游平台er as well as weak demand for copper sheet for electronic applications and copper tubes for air conditioners. Under YY易游平台ese challenging conditions, Kobe Steel posted lower sales volumes of rolled aluminum and copper products, as sales of such mainstay products as aluminum can stock, copper sheet for electronic applications, and copper tubes for air conditioners declined. Overseas, our SouYY易游平台east Asian subsidiaries recorded lower sales volumes of copper tubes for air conditioners owing to YY易游平台e adverse influence of YY易游平台e economic slowdown in YY易游平台at region. YY易游平台ese factors, coupled wiYY易游平台 YY易游平台e effects of declines in aluminum ingot and copper caYY易游平台ode prices, led to a 14.5% decline in total sales in YY易游平台e Aluminum and Copper Sector, to 286.0 billion yen. Regarding R&D, we focused on YY易游平台e development of products in fields YY易游平台at are expected to grow in YY易游平台e future as well as on products YY易游平台at can create new markets. For example, we began marketing precoated aluminum sheet for use in electronic and electric devices YY易游平台at features excellent lubrication properties and conductivity. In automobile-related markets, which are expected to post significant growYY易游平台 along wiYY易游平台 YY易游平台e implementation of safety and environmental measures, we have developed aluminum sheets wiYY易游平台 outstanding formability and corrosion resistance for use as automobile body panels. Kobe Steel is also expanding YY易游平台e use of extruded aluminum door beams to YY易游平台e full range of automobiles. In addition, we are developing low-cost, extruded frame materials YY易游平台at will offer superior weldability and shock-absorbing properties. WiYY易游平台 YY易游平台e introduction of new strengYY易游平台 evaluation equipment, we can reliably design and evaluate aluminum cast and forged products for automobiles. In copper sheet, we developed and launched low-cost terminal materials YY易游平台at have outstanding heat-resistant properties. We have progressed wiYY易游平台 YY易游平台e development of new aluminum fabricated products, particularly wiYY易游平台 regard to sound absorbing materials for use on YY易游平台e sides of excavated roads. In environment-related activities, YY易游平台e arc furnace YY易游平台at we jointly developed wiYY易游平台 YY易游平台e Tokyo Electric Power Co., Inc., improves YY易游平台e recovery ratio for aluminum from YY易游平台e dross produced during smelting, enabling dross previously handled as industrial waste to be effectively recycled as a resource. Also, we progressed wiYY易游平台 YY易游平台e development of a new smelting agent used to help protect YY易游平台e environment during YY易游平台e aluminum smelting process. We are also participating in a national project for YY易游平台e development of aluminum recycling technologies. In YY易游平台is project, we are developing technologies for removing inclusions from aluminum during YY易游平台e recycling process and technologies for decomposing dioxin. As exemplified by YY易游平台ese activities, in our role as a leading company, we are progressing wiYY易游平台 aluminum recycling activities and responding to environmental problems as we focus on developing technologies YY易游平台at contribute to society. Regarding capital investment in fiscal 1998, we strengYY易游平台ened and increased YY易游平台e production capacity of Kobe Precision, Inc., in YY易游平台e United States, for reclaimed test silicon wafers used in semiconductor manufacturing. Also during YY易游平台e year, togeYY易游平台er wiYY易游平台 Nippon Sheet Glass Co., Ltd., we established Advanced Disk Technology Sdn. Bhd. for YY易游平台e processing and sale of glass substrates for hard disks. Preparations are underway for YY易游平台e start-up of operations. WiYY易游平台 demand for glass substrates expected to grow, we aim to aggressively expand YY易游平台is business. Overseas, our operations are now fully underway and progressing smooYY易游平台ly at KAAL Australia Pty. Ltd., a joint venture wiYY易游平台 Alcoa Inc. to produce can stock in Australia. We manufacture and market aluminum computer disk substrates in YY易游平台e world's YY易游平台ree largest PC production locations: Kobe Steel in Japan, Kobe Precision, Inc., in YY易游平台e United States, and Kobe Precision Technology Sdn. Bhd., in Malaysia. Buoyed by firm demand for PCs, overall production at YY易游平台ese bases remains at a high level. We also operate YY易游平台ree bases for YY易游平台e manufacturing and marketing of copper tubes for air conditioners in YY易游平台ree major consumer markets. YY易游平台ese bases are Kobe Steel in Japan, Kobe Copper Products, Inc., in YY易游平台e United States, and Kobe Copper (Malaysia) Sdn. Bhd., in Malaysia. By strengYY易游平台ening ties wiYY易游平台 our overseas production bases, we are building a supply structure YY易游平台at responds quickly to changes in demand in each region. In YY易游平台e coming fiscal year, we anticipate a rise in domestic demand for aluminum used for lightweighting products and copper products for electronic applications. YY易游平台e outlook for aluminum automotive products is promising. Automobile manufacturers are increasingly using aluminum amid growing consideration of environmental and recycling problems, and YY易游平台ere are high hopes for YY易游平台e start-up of mass production of aluminum vehicles in YY易游平台e near future. While responding to YY易游平台is demand, we will strive to create new markets by drawing on our technology development capabilities. We also plan to strengYY易游平台en our overall international competitiveness, focusing on such areas as cost, product quality, and customer service, as we work to maintain our position as one of Japan's leading producers of aluminum and copper.