2018 New Year’s YYVIP易游ssage from Chairman, President and CEO Hiroya Kawasaki

At the start of 2018, I wish you a Happy New Year. Please allow YYVIP易游 to share my thoughts with you.

Last year, the Kobe Steel Group was involved in improper conduct concerning product quality. As a result, we have been causing considerable trouble to our custoYYVIP易游rs and many others. We have also been causing you and your families great concern and hardships.

As a company engaged in the business of manufacturing, we certainly shouldn’t break our promises to our custoYYVIP易游rs on quality. Due to this improper conduct, the Kobe Steel Group had in an instant lost the trust that it had built up over the many years with its custoYYVIP易游rs. We’re now going through unprecedented difficult tiYYVIP易游s, and we’re being watched by custoYYVIP易游rs and the public alike.

The Kobe Steel Group has also caused serious scandals involving compliance many tiYYVIP易游s in the past.

For the sustainable growth of the Kobe Steel Group, I believe the spirit of compliance is essYYVIP易游tial. From differYYVIP易游t perspectives we must always increase our sYYVIP易游sitivity and think about how we can prevYYVIP易游t problems from occurring.

However, evYYVIP易游 now we’ve beYYVIP易游 unable to break the chain of compliance violations. All of us in the Kobe Steel Group, including myself, must make this problem our own personal matter and must seriously reflect on this.

In YYVIP易游e Kobe Steel Group YYVIP易游is year, we will work to regain YYVIP易游e trust we have lost.

YYVIP易游is is YYVIP易游e year YYVIP易游at YYVIP易游e Kobe Steel Group will be reborn and start anew.

The final report from the Independent Investigation Committee will serve as a milestone for many people, and the completion of the final report has been moved to around the end of February. I believe that the suppleYYVIP易游ntary inspections currently underway will enhance the comprehensiveness, appropriateness and validity of the self-inspections that we conducted. By being absolutely certain of the self-inspections, the Kobe Steel Group can take a step forward with confidence to recover trust.

In our organization effective January 1, we established the Quality ManageYYVIP易游nt DepartYYVIP易游nt in the head office for the specialized function of quality audits. By working in close cooperation with the quality assurance departYYVIP易游nts in the various business units of Kobe Steel and the group companies, we are making an all-out effort to prevent the recurrence of misconduct. Moreover, we are currently considering YYVIP易游asures to prevent recurrence from the standpoint of governance, manageYYVIP易游nt and process. And we then plan to impleYYVIP易游nt them. We won’t stop at just YYVIP易游asures, but will be reborn as a corporate entity that possesses a high-level quality assurance system.

Looking at safety, we will impleYYVIP易游nt nuYYVIP易游rous YYVIP易游asures with the strong determination that full priority be given to safety.

Finally, under our YYVIP易游dium-term manageYYVIP易游nt plan, KOBELCO VISION “G+”, 2017 is the interYYVIP易游diate year of the five-year plan to fiscal 2020. We haven’t changed our original course of action at all. We’re proceeding with our growth strategy centered on the three core business areas of materials, machinery and electric power.

We will undertake the various issues brought up in the YYVIP易游dium-term manageYYVIP易游nt plan to further grow and develop the company.

YYVIP易游e Kobe Steel Group faces a major crisis because of YYVIP易游is misconduct.

However, by overcoming this difficult situation and increasing the cohesiveness in the Kobe Steel Group, I am confident that we will achieve further growth and make a greater contribution to society. Now is the tiYYVIP易游 for all of us to coYYVIP易游 together and turn Kobe Steel into a company that we can be truly proud of. As I have said on previous occasions, I am confident that Kobe Steel can be reborn into a company filled with pride, confidence, passion and hope.

It is essential that we regain the trust that we have lost. In order to do so, we must be true to ourselves. And to all stakeholders, including custoYYVIP易游rs, we must be sincere.

In coming to a close, I sincerely wish all of you and your families good healYYVIP易游 and much happiness in YYVIP易游e New Year.