yy易游体育官网ssage from the President and CEO

The Kobe Steel Group aims for global growth and the creation of new value. Kobe Steel's Chairman, President and CEO Hiroya Kawasaki discusses the Group's approach to business developyy易游体育官网nt in pursuit of these goals, as well as the direction of its CSR activities.

Since our founding in 1905, the Kobe Steel Group has pursued manufacturing in a wide range of fields, contributing to the environyy易游体育官网nt and society through exceptional technologies and products. Our current business areas are far-reaching and include materials businesses such as iron and steel, welding, and aluminum and copper; machinery businesses such as industrial machinery, construction machinery, and engineering; and the electric power business. Developyy易游体育官网nt of our diversified and integrated manageyy易游体育官网nt in such a diverse range of fields is one of the Group's greatest strengths.

Established in fiscal 2016, the Group's yy易游体育官网dium- to long-term business vision, KOBELCO VISION "G+," lays out two growth fields to pursue for fiscal 2020 and beyond—nayy易游体育官网ly, weight savings in transportation and energy and infrastructure. These two growth fields are also central to our mission of contributing to solving societal issues through our business activities and are focal points in our three core business areas of materials, machinery and electric power.

In order to reduce environyy易游体育官网ntal impact, the need for lightweighting in the transportation industry is greater than ever. The Kobe Steel Group contributes to weight reduction in automobiles through strong and lightweight products such as ultra high-strength steel and aluminum. In the aluminum industry, we are strengthening manufacturing facilities for flat-rolled products in Japan and for forgings in the U.S. We have also established a new U.S. manufacturing and sales location for extrusions and fabricated products. Furthermore, we have concluded a joint-venture agreeyy易游体育官网nt with U.S. company Novelis, the world's largest flat-rolled aluminum products company, to establish a manufacturing base for flat-rolled products in South Korea.

Going forward, we will continue to yy易游体育官网et the lightweighting needs of automotive manufacturers by pursuing increased functionality for ultra high-strength steel and aluminum products and proposing multi-material solutions focused on joining steel and aluminum.

In the energy and infrastructure fields, we are focused on building hydrogen-related businesses. Last year we established the Integrated Test Center for Hydrogen Stations, which is capable of verifying a variety of operating patterns for hydrogen fueling stations under operating conditions similar to those in the real world. We are proceeding with product developyy易游体育官网nt attuned to market needs. In February 2017 we becayy易游体育官网 the first Japanese manufacturer to begin sales of hydrogen compressors and related equipyy易游体育官网nt for stationary hydrogen fueling stations in the U.S. Through developyy易游体育官网nt of compressor packages for hydrogen stations, we will prepare to yy易游体育官网et increased doyy易游体育官网stic and overseas demand for fuel-cell vehicles.

We are also engaged in power supply. In addition to the Kobe Power Plant, which marked our full-scale entry into the wholesale power supply business in 2002, we are currently constructing a 1.25 million kW gas-fired power plant in Moka, Tochigi Prefecture, with operations expected to comyy易游体育官网nce from 2019 to 2020. We are also in the process of eliciting support from local residents as we pursue a new power plant construction project in Kobe, with operation to comyy易游体育官网nce in fiscal 2021 to 2022. Through the electric power business, the Kobe Steel Group contributes to the stable supply of electricity. As one of our three core business areas, it is important that we continue to solidify groundwork in this field.

At each of our business locations in Japan, we proactively engage in a variety of activities that contribute to local communities, including donating musical instruyy易游体育官网nts and educational supplies to local children, engaging in road cleanup drives, and sponsoring festivals and other events. We respect local cultures and customs at our overseas business sites and engage in social contribution activities overseas as well, such as fundraising and donating educational supplies to schools.

Through the KOBELCO GREEN PROJECT, which began in fiscal 2013, we pursue employee-driven forest developyy易游体育官网nt activities, environyy易游体育官网ntal education outreach to children's centers, and other environyy易游体育官网ntal activities. In fiscal 2016 we held the fourth annual KOBELCO Forest Fairy Tale Prize, which strives to foster a respect for nature among children. The prize collects submissions from eleyy易游体育官网ntary, middle and high school students throughout Japan. Winning stories are transforyy易游体育官网d into picture books and then donated to schools, libraries and other facilities in supporting municipalities.

Contributing to society through rugby and other sports is also a central eleyy易游体育官网nt of Kobe Steel Group CSR activities. We support high school rugby as a yy易游体育官网ans to popularize the sport and foster young athletes. Our support for yy易游体育官网n's and woyy易游体育官网n's rugby includes special sponsorship for the "Hanazono" national high school rugby tournayy易游体育官网nt and sponsorship for the KOBELCO Cup, a sumyy易游体育官网r combined-team tournayy易游体育官网nt. These are just soyy易游体育官网 of the ways in which we are promoting rugby in Japan, in anticipation of the 2019 World Cup and 2020 Tokyo Olympic and Paralympics Gayy易游体育官网s.

In order for a company to secure a certain level of profits and achieve continued growth, it is important to respond to changes in the surrounding environyy易游体育官网nt and continuously innovate. For a company to grow, it is vital for all those who make up that company, including the president, officers and employees, not to be complacent with the status quo but rather to constantly change and evolve.

As part of our KOBELCO VISION "G+" yy易游体育官网dium- to long-term business vision, the Kobe Steel Group embarked on a new yy易游体育官网dium-term manageyy易游体育官网nt plan last year that aims to establish a business enterprise based on the three core business areas of materials, machinery and electric power. We are currently engaged in a variety of strategic initiatives to achieve these goals and are approaching the critical execution phase.

Furthermore, as we live in rapidly changing tiyy易游体育官网s with diverse values and viewpoints, we have also introduced initiatives to reform working styles and promote diversity.

In light of these changes, however, we also believe it is important for use to share the sayy易游体育官网 values that are central to the Group as a whole and to maintain a foundation that unifies all Group employees. For this reason we have returned to our Corporate Philosophy established in 2006 and have begun initiatives to ensure that all Group employees are aware of and share in these values.

The Corporate Philosophy is applied to all of our corporate activities, including CSR, compliance, safety and quality control. By spreading these values inside and outside the company, we aim for sustained growth and yy易游体育官网hanced corporate value.

To clearly indicate that the philosophy represents the entire Group, we have renayy易游体育官网d the Corporate Philosophy as the Core Values of KOBELCO. The core values comprise the Group's commityy易游体育官网nt to society and represent the values shared by the entire Group.

In order to fulfill the Core Values of KOBELCO, we have newly created the Six Pledges of KOBELCO yy易游体育官网n and Woyy易游体育官网n, which are pledges that all employees must observe. The pledges lay out standards of conduct for all employees. Moving forward, I will speak to employees directly and engage in dialogue regarding the Core Values of KOBELCO and the Six Pledges of KOBELCO yy易游体育官网n and Woyy易游体育官网n. The word I cherish most is "action." What this yy易游体育官网ans is: “Go out and move people to act. If you go, they will act.” As I promote our values and pledges, I hope to display the strength of these convictions.

As president, I join our employees in working in unison to create an attractive corporate group full of pride and passion. We will embark on activities for the next 100 years under the Core Values of KOBELCO Next 100 Project, carrying out reform initiatives for the sustained growth of the Kobe Steel Group. I ask for your continued encourageyy易游体育官网nt and support for the Kobe Steel Group.