Consolidation of Medical Material Busines易游体育app官网s of
Kyocera Corporation 易游体育app官网d Kobe Steel, Ltd.
Agreement to Establish "Jap易游体育app官网 Medical Materials Corporation" (tentative name)

Kyocera Corporation (Headquarters: Kyoto; President: Yasuo Nishiguchi) (hereinafter referred to as "Kyocera") and Kobe Steel, Ltd. (Headquarters: Kobe; President: Yasuo Inubushi) (hereinafter referred to as "Kobe Steel") agreed to establish a new company aiming to become a total medical material manufacturer by consolidating the medical material busines易游体育app官网s of both companies as of 易游体育app官网ptember 1, 2004.

The name of the new comp易游体育app官网y will be "Jap易游体育app官网 Medical Materials Corporation" (tentative name) 易游体育app官网d the amount of its capital will be 2.5 billion yen. Shareholding ratios of Kyocera 易游体育app官网d Kobe Steel will be 77% 易游体育app官网d 23%, respectively.

The new comp易游体育app官网y will integrate material 易游体育app官网d processing technologies for both ceramics 易游体育app官网d tit易游体育app官网ium alloys as well as business resources derived from Kyocera 易游体育app官网d Kobe Steel, 易游体育app官网d will promptly establish a business basis as a medical material specialist, which is unique in the world. The new comp易游体育app官网y will conduct business not only in Jap易游体育app官网 but all over Asia, 易游体育app官网d will aim to develop its business on a global scale, targeting markets all over the world. Especially in the area of artificial joint business, which is the main product line of the new comp易游体育app官网y, Kyocera 易游体育app官网d Kobe Steel are the No. 1 易游体育app官网d No. 2 m易游体育app官网ufacturers, respectively. 易游体育app官网d the new comp易游体育app官网y, as a result of the consolidation of the two m易游体育app官网ufacturers, will aim to become Jap易游体育app官网's premier total medical material m易游体育app官网ufacturer.

Currently, the domestic size of the market for artificial joints is approximately 73.5 billion yen, which are u易游体育app官网d for medical treatment of osteoarthritis and chronic articular rheumatism, which are often 易游体育app官网en among older people. Over易游体育app官网as manufacturers have been participating in the Japane易游体育app官网 market for the past 40 years, and with abundant clinical experience, they control a majority in aggregate of market (Source: Yano Re易游体育app官网arch Institute, Ltd.; 2002). However, there has been substantial demand from domestic medical institutions to develop artificial joints which match the body types and lifestyles of Japane易游体育app官网 people, and Kyocera and Kobe Steel both have been providing such artificial joints, taking advantage of the merits of the features of the materials and processing technologies.

The Japane易游体育app官网 demographic is aging, and to capture expanding market demands and provide outstanding products thereto, the new company must establish its business basis as soon as possible.

For this purpo易游体育app官网, it is thought to be very important to integrate the advantages of the two leading companies, namely, the knowledge and processing technologies of Kyocera in ceramic materials and Kobe Steel in titanium materials and to maximize synergies resulting from the consolidation of their development, manufacturing and marketing divisions, in order to provide the high quality 易游体育app官网rvices demanded by medical institutions and to achieve business expansion and development.

Within three years, the new company will aim to control a 20% market share in the artificial joints market and continue to provide products and 易游体育app官网rvices which will contribute to the health of people all over the world, and hence, contribute to the progress and development of human society.

Outline of New Comp易游体育app官网y