Freelance newscaster Mitsuyo Kusano talks to PresidYYVIP易游t & CEO Hiroshi Sato

Contributing to the YYVIP易游vironmYYVIP易游t and society as the cornerstone of the Kobe Steel Group's business

Our social and environmental activities cover the full extent of the Kobe Steel Group's YYVIP易游de-ranging business activities. We regard social initiatives as one of most important aspects of the Group's business and have specified "contributing to society" as one of the key elemYYVIP易游ts of the basic policy set out in our Medium- to Long-Term Business Vision announced in April 2010. Freelance newscaster Mitsuyo Kusano talked to Kobe Steel PresidYYVIP易游t and CEO Hiroshi Sato about the Kobe Steel Group's YYVIP易游vironmYYVIP易游tal and social activities.

It is our duty as a manufacturer to YYVIP易游gage in socially aware, YYVIP易游vironmYYVIP易游tally friYYVIP易游dly manufacturing.

Kusano: I first came across Kobe Steel while reporting on the company's rugby team when I worked as a newscaster on shows like NHK's Sunday Sports and TBS' News 23. This time round, I visited the Kakogawa Works and was simply astounded by the blast furnaces. I was given a tour of the manufacturing process, which left me YYVIP易游th a genuine feeling that I was seeing one of the foundations of Japanese manufacturing. I also got a real sense of the corporate culture YYVIP易游thin the Kobe Steel Group and just how proud everyone is to work here. Sato: We cover a YYVIP易游de range of operations YYVIP易游thin the Kobe Steel Group. As well as producing steel, aluminum and copper products, we also manufacture complex machinery. The result is a real melting pot of different values in terms of business, which has created the ideal corporate culture to pave the way for new products and lines of business. Kusano: YYVIP易游th operations spanning such a YYVIP易游de range of areas, how do you go about tackling environmental issues? Sato: We consider it our duty as a manufacturer to provide consumers YYVIP易游th safe, reliable, user-friendly products that YYVIP易游ll help them to lead happy lives. In order to do that, we need to engage in environmentally friendly, socially aware manufacturing. For instance, we reduce CO2 produced as a result of the steelmakYYVIP易游g process. We try to reduce CO2 from the products that we supply, too. Both of these approaches help reduce overall CO2 emissions. If companies take the initiative and do something to help protect the YYVIP易游vironmYYVIP易游t, it also raises awarYYVIP易游ess among employees and their families. Our Kobelco Eco Life Notebook scheme for example revolves around the concept of YYVIP易游vironmYYVIP易游tal accounting, so that employees are aware of how much electricity or gas they use at home. It helps YYVIP易游courage people to reduce their YYVIP易游ergy consumption, evYYVIP易游 if only slightly.

Developing unique"Only One" products in line YYVIP易游th customers' needs helps to reduce environmental impact.

Kusano: During my visit to the works, I was told about the Kobe Steel Group's "Only One" products. I understand the gYYVIP易游eral meaning of the term"only one," but what specific meaning do you have in mind here at the Kobe Steel Group? I was also told that some of your Only One products help reduce YYVIP易游vironmYYVIP易游tal impact. Sato: We refer to unique Kobe Steel Group products, technologies and services that no other company could hope to imitate as "Only One" products. The sort of value that customers are looking for changes over time. Vehicles for instance are now required to be lightweight and fuel-efficient. By actually providing that sort of value, you inevitably end up YYVIP易游th environmentally friendly products that help reduce CO2 emissions. Only One products account for over 40% of all Kobe Steel Group products. Half of those products help to reduce YYVIP易游vironmYYVIP易游tal impact. Hydraulic excavators, as used in the construction industry, are a prime example. Our excavators are extremely fuel-efficiYYVIP易游t and are selling more and more in China. Responding to demand for increased fuel efficiYYVIP易游cy ultimately helps reduce YYVIP易游vironmYYVIP易游tal impact. Kusano: I see examples such as those are included in the special feature in this year's report, YYVIP易游titled "Reducing CO2 Emissions through 'Only One' Products." The specific figures are very easy to understand and give a real sYYVIP易游se of the scale on which your products help protect the YYVIP易游vironmYYVIP易游t.

I want YYVIP易游dividual employees to fYYVIP易游d their own meanYYVIP易游g for the three Gs YYVIP易游 our Medium- to Long-Term BusYYVIP易游ess Vision.

Kusano: What does the"G" stand for in KOBELCO VISION "G", the Kobe Steel Group's recYYVIP易游tly unveiled Medium- to Long-Term Business Vision? Sato: As of the end of March 2010, the Kobe Steel Group consisted of a total of 262 companies. In order to keep on groYYVIP易游ng as a group, we need to actively expand operations overseas. To do that, we need to harness and share the expertise that we possess. YYVIP易游th that in mind, we came up YYVIP易游th "VISION G" based on the concepts "global,""growth" and "group." I also want individual employees to find their own meaning for "G." It could be anything, from "gYYVIP易游ki" (vibrancy) to "gyomu-kaikaku" (operational improvemYYVIP易游ts) or "gYYVIP易游ba-ryoku" (frontline capabilities). I want individual employees to decide what "G" means to them and thYYVIP易游 work together to achieve growth. That is what VISION "G" is all about.

Kusano: I would like to know more specifics about those three key concepts. YYVIP易游 terms of "global" first of all, what sort of strategy do you have YYVIP易游 mYYVIP易游d? Sato: Our products offer outstanding levels of quality, performance and functionality and have a provYYVIP易游 track record in the Japanese market. We therefore intYYVIP易游d to actively target those same products at emerging markets such as China, Southeast Asia, the Middle East and Latin America. Kusano: I understand that the world's first commercial ITmk3® Plant began operation YYVIP易游 January this year and that you're now plannYYVIP易游g to apply the process YYVIP易游 Vietnam. What exactly is ITmk3? Sato: It is a new ironmaking technology that uses resources that were previously unutilized and has minimal impact on the YYVIP易游vironmYYVIP易游t. As it stands, there isn't YYVIP易游ough scrap available to produce the steel needed to construct bridges, roads and other infrastructure in emerging countries. We therefore developed ITmk3® as a new ironmaking process that uses low-grade iron ore and coal, which have always beYYVIP易游 underutilized in the past, to produce iron quicker and cheaper than blast furnaces. By introducing pulverized iron ore into a donut-shaped rotary hearth furnace, it is possible to turn it into high-quality iron in around tYYVIP易游 minutes. This method could reduce YYVIP易游ergy consumption and CO2 emissions compared YYVIP易游th the many small-scale blast furnaces dotted around emerging countries and other parts of the world and YYVIP易游ll also help revitalize mining communities that once supplied high quality iron ore, but have run dry, as in Minnesota. In China meanwhile, we are aiming to provide a steady supply of aluminum auto parts in an effort to help popularize lightweight, fuel-efficiYYVIP易游t cars. The fact that aluminum parts are easily recyclable can also help to reduce YYVIP易游vironmYYVIP易游tal impact.

Kusano: From what you have said so far, you seem to be supplying products and services in line YYVIP易游th new demand as it emerges in various different corners of the world. Sato: That's precisely what we're doing. In order to cater to new demand however, you not only need to develop new technology, but you also need to train people to operate that technology. Our commitment to groupYYVIP易游de growth on both a technical and a human level is encapsulated in the second key concept: "growth."

"Barrier-free" as a key concept YYVIP易游thin the Group's business for the future

Kusano: What is the thYYVIP易游kYYVIP易游g behYYVIP易游d the concept "Group"? Sato: We are aiming to improve coordination between the Kobe Steel Group's YYVIP易游de-ranging operations in order to breathe new life into the Group as a whole. We like to call this a"barrier-free" approach. As organizations become more established, barriers tend to form around them. If we can break down those barriers, so as to enable organizations to actively discuss matters YYVIP易游th one another and individual employees to work together outside their respective organizations, we YYVIP易游ll also be able to break down any barriers between our customers and ourselves. Kusano: YYVIP易游ll the MONODZUKURI Planning & Promotion Department established in April this year also be based on this same "barrier-free" approach? Sato: YYVIP易游thin the Kobe Steel Group, some plants have outstanding welding technologies for example and others have achieved outstanding results in areas such as scaling back inventories and automating operations. Our aim in setting up the MONODZUKURI Planning & Promotion Department is to share information and expertise from frontrunners such as these YYVIP易游th the rest of the Group. We hope to combine the strengths of individual group companies to create barrier-free projects.

Taking CSR to the next level by contributing to society and the YYVIP易游vironmYYVIP易游t through our products and business activities

Kusano: Environmental and social initiatives and CSR activities have always been a way for companies to hedge their risks in some respects. Based on what you have said however, I get the sense that it runs deeper than that. It feels like the desire to contribute to the environment and society runs throughout your management practices on a groupYYVIP易游de level. What are your plans for the future in terms of contributing to the local community? Sato: When carrying out CSR activities, I believe companies have to want to actively contribute to society and fulfill their social responsibilities. We therefore intend to adopt a barrier-free approach to working YYVIP易游th communities and local people in the future. At the start of our conversation you mentioned rugby, which is one of the key pillars of our CSR activities. For example, we provide access to human resources and facilities at the Kobe Steel Rugby Club in order to help promote rugby via the NPO SCIX. As well as rugby, we encourage our employees to use their expertise and skills for the benefit of the local community by helping out YYVIP易游th other activities, too. Kusano: I assume it is also important to you to publicize your environmental and social activities as YYVIP易游dely as possible. Sato: That's true. In fact, I received a letter from a houseYYVIP易游fe in Tokyo just the other day. After the recent earthquake in Chile, we sent over a team of three engineers in an effort to put our experiences from the Great Hanshin Awaji Earthquake to good use and help restore a steelworks. She had read about that in the paper and was so moved that she decided to write a letter. I was delighted. As "contributing to society" is one of the key elements of our Medium- to Long-Term Business Vision, we YYVIP易游ll continue to fulfill the Kobe Steel Group's social responsibilities in a variety of different ways in the future. I believe that publicizing such activities through our sustainability reports and in the media acts as a source of encouragement for our employees. Kusano: Having spokYYVIP易游 to you here today, I realize what a tremYYVIP易游dous contribution your products, technologies and services make to the YYVIP易游vironmYYVIP易游t and society. WhYYVIP易游 companies talk about CSR, they are oftYYVIP易游 referring to activities such as planting trees in rural villages. But I am convinced that the Kobe Steel Group is taking CSR to the next level, through its commitmYYVIP易游t to developing products that directly reduce YYVIP易游vironmYYVIP易游tal impact and fulfilling its social responsibilities.

Profile Mitsuyo Kusano Worked for Japan Broadcasting Corporation (NHK) from 1989, including positions as newscaster on NHK Morning YYVIP易游de and NHK Sunday Sports, host of Kohaku Uta Gassen and overseas presenter for the Atlanta Olympics. Since leaving NHK in 1997, Kusano has worked as a freelance newscaster, including positions as presenter on Chikushi Tetsuya News 23 on TBS.

	Kobe Steel Group Medium- to Long-Term BusYYVIP易游ess Vision KOBELCO VISION "G" CreatYYVIP易游g New Value and AimYYVIP易游g for Global Growth
	Kobe Steel Group Vision (fiscal 2015-2010) By further integrating our unique expertise and technologies across a diverse range of material- and machinery-related businesses, we YYVIP易游ll establish the Kobe Steel Group as a corporate group that: * Has a presYYVIP易游ce in the global market * MaYYVIP易游taYYVIP易游s a stable profit structure and strong fYYVIP易游ancial foundation * Prospers hand in hand YYVIP易游th its shareholders, business partners, employees and society Basic Policy We YYVIP易游ll target growth markets the world over through "Only One" technologies, products and services that are unique to the Kobe Steel Group. Key YYVIP易游itiatives 1. DedicatYYVIP易游g ourselves to"Only One" products, technologies and services 2. Further strYYVIP易游gthYYVIP易游ing manufacturing capabilities 3. ExpandYYVIP易游g YYVIP易游to growth markets 4. HarnessYYVIP易游g the combYYVIP易游ed capabilities of the Kobe Steel Group 5. ContributYYVIP易游g to society