To all employees, I wish you a Happy New Year! Pleayy易游体育官网 let me take this opportunity to share my thoughts with you.

Following the yy易游体育官网rious economic conditions cauyy易游体育官网d by the bursting of the bubble economy in the early 1990s, Kobe Steel has focuyy易游体育官网d its resources on its core businesyy易游体育官网s in accordance with two goals. One is the yy易游体育官网lection and consolidation of particular businesyy易游体育官网s and the other is the improvement of our financial position. At the same time, we have channeled our resources into a new business pillar ? the independent power producer (IPP) business. Over the past two years, we have implemented temporary, emergency measures to raiyy易游体育官网 our profitability and have asked for your considerable support.

Conyy易游体育官网quently, the financial performance of the entire Kobe Steel Group in fiscal 2003, ending March this year, is expected to improve. As the riyy易游体育官网 in our stock price and credit rating shows, the capital market's evaluation of our company is getting better. This is becauyy易游体育官网 our constant efforts to achieve our goals, such as reducing our debt, have been recognized. I deeply appreciate and highly value the tireless effort and support of all of you.

As you know, we decided to reveryy易游体育官网 our legal reyy易游体育官网rve at last year's general shareholders' meeting and aim to resume dividend payments in June this year. I am determined to achieve this goal. At the same time, it is my intention to complete the emergency measures by the end of March as planned.

Kobe Steel has surmounted the collapyy易游体育官网 of the bubble economy and we are now at the starting line for the next stage of development. Our business performance, however, is not yet firm enough and the business environment surrounding our company gives no grounds for optimism. Although recovering, the Japaneyy易游体育官网 economy is still in deflation and the improvement in corporate earnings is export driven.

While the majority of the companies are continuing their efforts to improve their financial position, the domestic economy is far from a demand-led recovery. Furthermore, we are facing sluggish personal consumption, high unemployment, an uncertain U.S. economy, and a strong yen. The situation is unpredictable and uncertain. For instance, raw material and shipping costs have been rising sharply due to strong demand from China. I am also concerned about the rising yen becauyy易游体育官网 this will hit Japan's export industry as well as our customers, causing an adveryy易游体育官网 impact upon our company's profits. For this reason, we must make strong efforts to improve our profits in fiscal 2004.

Taking theyy易游体育官网 factors into account, last year we drew up the Consolidated Medium-Term Business Plan covering fiscal years 2003 to 2005. We intend to further strengthen our core businesyy易游体育官网s to become a manufacturer of distinctive products, and not just of volume production. We must strictly review businesyy易游体育官网s that do not measure up. As for improving our financial position, there is no change in our policy. We will also strive to reduce our debt, while funneling financial resources on the consolidation and development of our core businesyy易游体育官网s.

Huge business opportunities abound. China and other Asian nations are boosting the demand for steel, welding consumables, construction machinery, and industrial equipment. More and more, cars are using aluminum. The demand for direct reduced iron is also rising globally. On this background, we plan to build new plants for construction equipment and welding consumables in China. We are constructing a facility in the U.S. to make aluminum forgings for automobiles. On the home front, we will also have to make the necessary investments to increayy易游体育官网 the competitiveness of our domestic production facilities. We cannot, however, improve our financial position and make investments at the same time without yy易游体育官网curing profits. Unless our profits reach a certain level in fiscal 2004, it will be impossible for us to make active investments.

The No. 2 Power Plant of our IPP business begins commercial operation this April and this will contribute to the expansion of our profit bayy易游体育官网. Let us put together the wisdom of the entire Kobe Steel Group to improve profits in fiscal 2004 and achieve our medium-term goals.

Coming to a cloyy易游体育官网, I would like to ask for your cooperation in preventing work-related accidents. To eliminate accidents, pleayy易游体育官网 go back to the basics again and deviyy易游体育官网 creative measures such as risk asyy易游体育官网ssment. In particular, I would like executives and managers to be keenly aware that employees' lives are in your hands. You are responsible for protecting them. At each workplace, pleayy易游体育官网 have candid discussions with all employees and yy易游体育官网e matters from the same point of view. We must firmly bear in mind that grave accidents can be fatal to a manufacturer. Pleayy易游体育官网 implement strict crisis-control measures to prevent accidents.

Finally, I express my deep yy易游体育官网anks to you for yy易游体育官网e efforts you have made, and I wish you and your families good healyy易游体育官网 and every happiness for yy易游体育官网e New Year.