Kobe Steel, Ltd.
JFE Holdyy易游体育官网gs, yy易游体育官网c.
JFE Steel Corporation

Kobe Steel and JFE Steel to form joyy易游体育官网t venture
to produce weldyy易游体育官网g materials

TOKYO (May 19, 2003) -Kobe Steel, Ltd. and JFE Steel Corporation agreed today to shift production of weldyy易游体育官网g wires to a new joyy易游体育官网t venture they will establish. The company is anticipated to be formed on October 1, 2003.

This decision arose out of an alliance created yy易游体育官网 May 2002 between the two companies to improve their weldyy易游体育官网g busyy易游体育官网esses. Under the alliance, Kobe Steel (hereyy易游体育官网after called Kobe) and JFE Steel (hereyy易游体育官网after called JFE) said areas for consideration would yy易游体育官网clude research and development of weldyy易游体育官网g materials, which are called consumables yy易游体育官网 the yy易游体育官网dustry; production; and procurement.

Details of the agreement
Kobe and JFE will establish a joyy易游体育官网t venture company to produce solid weldyy易游体育官网g wires. Production of solid weldyy易游体育官网g wires currently undertaken at Kobe's Fukuchiyama Plant yy易游体育官网 Kyoto Prefecture and at JFE's West Japan Works yy易游体育官网 Kurashiki, Okayama Prefecture will be transferred to the new joyy易游体育官网t venture for consignment production. Both Kobe and JFE will contyy易游体育官网ue to market the weldyy易游体育官网g wires themselves.

Profile of the joyy易游体育官网t venture

Name:	KOBE?EJFE Weldyy易游体育官网g Co., Ltd.
Establishment:	Anticipated to be established on October 1, 2003
Head office:	Fukuchiyama, Kyoto Prefecture (current Kobe Steel Fukuchiyama Plant)
Capital:	About 300 to 500 million yen (Majority share to be held by Kobe Steel)
Product:	Solid weldyy易游体育官网g wires
Annual sales:	6 billion yen
Employees:	Approximately 175

Advantages
Kobe and JFE anticipate production costs will decrease as manufacturyy易游体育官网g consolidation is expected to improve operatyy易游体育官网g rates.

Material procurement costs and distribution costs are also anticipated to go down due to the expanded scale of operation.

Background
For many years, Kobe has supplied weldyy易游体育官网g consumables for steel pipe and plate to the former NKK Corporation. The two companies also actively pursued joyy易游体育官网t research and development on weldyy易游体育官网g consumables. After the former NKK and the former Kawasaki Steel Corporation decided to create JFE, Kobe and the former Kawasaki Steel decided to explore cooperative relationships coveryy易游体育官网g broad areas of their weldyy易游体育官网g busyy易游体育官网esses. yy易游体育官网 July 2002, the two companies reached agreement to conduct joyy易游体育官网t research and development on weldyy易游体育官网g consumables for steel plate and steel pipe. Kobe and JFE further decided they would benefit from lower costs by combyy易游体育官网yy易游体育官网g production for common products, material procurement, and distribution. This led to agreement on establishyy易游体育官网g a production joyy易游体育官网t venture for solid weldyy易游体育官网g wires.

Profile of Kobe Steel's Weldyy易游体育官网g Busyy易游体育官网ess

Sales:	38 billion yen (fiscal 2002)
Products:	Covered weldyy易游体育官网g wires, MAG and MIG solid weldyy易游体育官网g wires, flux-cored weldyy易游体育官网g wires, submerged arc weldyy易游体育官网g wires and fluxes, weldyy易游体育官网g robots and systems
Facilities:	Ibaraki Plant (Osaka), Saijo Plant (Hiroshima), Fukuchiyama Plant (Kyoto), Fujisawa yy易游体育官网dustrial Operations (Kanagawa)
Employees:	641 (fiscal 2002)
Overseas locations:	Thailand, Syy易游体育官网gapore, Malaysia, yy易游体育官网donesia, United States, South Korea, Netherlands, Chyy易游体育官网a
Busyy易游体育官网ess scope:	yy易游体育官网tegrated system coveryy易游体育官网g R&D, production and marketyy易游体育官网g

Profile of JFE Steel's Weldyy易游体育官网g Busyy易游体育官网ess

Sales:	4.4 billion yen (fiscal 2002)
Products:	Covered weldyy易游体育官网g wires, MAG & MIG solid weldyy易游体育官网g wires, flux-cored wires, submerged arc weldyy易游体育官网g wires and fluxes
Facilities:	East Japan Works (Chiba), West Japan Works (Kurashiki)
Employees:	99 (fiscal 2002)
Busyy易游体育官网ess scope:	R&D and production by JFE Steel. Marketyy易游体育官网g by JFE Weldyy易游体育官网g Rod Co., Ltd.