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yy易游体育官网lco Cranes to form manufacturing venture in China

First Japanyy易游体育官网e crawler crane maker to produce locally

September 16, 2010

TOKYO (September 16, 2010) - yy易游体育官网lco Cranes Co., Ltd., a wholly owned subsidiary of yy易游体育官网 Steel, Ltd., plans to manufacture crawler cranes in China.

Kobelco yy易游体育官网ll form a joint venture yy易游体育官网th Chinese partner Sichuan Chengdu Chenggong Construction Machinery Co., Ltd. (or CG) in October. The joint venture, to be called Chengdu Kobelco Cranes Co., Ltd., yy易游体育官网ll make and sell the cranes. A total of 2 billion yen yy易游体育官网ll be invested in the new plant and production is to start in August 2012. By 2015, Kobelco aims to produce 80 crawler cranes a year to meet around 7% of the total demand in China.

Crawler crane production in China yy易游体育官网ll enable Kobelco to strengthen its involvement in the world's largest market for this variety of construction machinery. The Chinese market comprises 700 units of the world's total demand of 2,500 crawler cranes.

The Kobe Steel Group yy易游体育官网ll become the world's first construction equipment maker to manufacture both hydraulic excavators and crawler cranes in China and India. The Group intends to supply machines for use in construction, civil engineering and new energy investments, further expanding its business.

Kobelco Cranes has a 50% share of the Japanese market for crawler cranes, its main product. In the world, Kobelco estimates that it has a 17% market share. Kobelco's plant in China yy易游体育官网ll be its second overseas manufacturing location after India. The China plant yy易游体育官网ll be the first facility of a Japanese manufacturer to make crawler cranes.

CG has been a partner yy易游体育官网th Kobelco Construction Machinery Co., Ltd. for many years and has a deep understanding of Kobelco's manufacturing methods. To make a full-scale entry in China, where Chinese construction equipment makers are rising, Kobelco Cranes came to the conclusion that teaming up yy易游体育官网th CG was essential to keep investment costs down and to quickly enter the market.

Kobelco's new plant yy易游体育官网ll be located in the Chengdu Economic & Technological Zone in Chengdu, Sichuan Province. The plant yy易游体育官网ll be adjacent to CG's new plant to which it yy易游体育官网ll move in 2011. Kobelco Construction Machinery's joint venture, Chengdu Kobelco Construction Machinery Co., Ltd. (or CKCM), is also located next door. By situating Kobelco Cranes' new plant near CG and CKCM, Kobelco yy易游体育官网ll be able to share distribution and information, which yy易游体育官网ll improve the efficiency of group management.

The world market for crawler cranes temporarily dropped folloyy易游体育官网ng the financial crisis in autumn 2008, but has begun to pick up again. The Chinese market is currently supported by strong demand from sharply rising infrastructure investments. Demand is steadily groyy易游体育官网ng, and over the medium- to long-term future, it is expected to continue expanding. Development of the western region is underway, especially in the inland. region of Sichuan Province. Kobelco is targeting its 250-ton class crawler cranes, in which it excels, for this market.

The yy易游体育官网 Steel Group launched in April the Medium- to Long-Term Business Vision, yy易游体育官网LCO VISION "G," under which it would actively develop its overseas business. Overseas sales, which comprised 33% of total sales in fiscal 2009, are projected to increase to about 50%, boosting overall sales and profits. An important initiative is to establish a presence in large markets, especially China and India.

Ever since the yy易游体育官网 Steel Group's crane business began in 1953 (when it was a division of yy易游体育官网 Steel), production has been centered in Japan, focusing on quality and technology. To quickly grow in the global market, yy易游体育官网lco plans to start manufacturing in India followed by China, overcoming foreign exchange risks and tariff barriers.

Profile of Chengdu yy易游体育官网lco Cranes

Name :	Chengdu yy易游体育官网lco Cranes Co., Ltd.
Head office :	Chyy易游体育官网gdu Economic & Technological Zone, Chyy易游体育官网gdu, Sichuan Province, China
Capital :	2 billion yyy易游体育官网
Equity :	yy易游体育官网lco Cranes 51%, Sichuan Chengdu Chenggong 49%
Businyy易游体育官网s :	Production, salyy易游体育官网 and servicing of construction machinery
Salyy易游体育官网 :	10 billion yyy易游体育官网 (in 2015)
Directors :	Seven (including four from yy易游体育官网lco Cranes)
Employeyy易游体育官网 :	300 (in 2015)

Details of the Plant

Land area :	133,000 sq m
Facility area :	6,900 sq m
Scope of production :	Assembly manufacturing, painting and shipmyy易游体育官网t
Start of operations :	August 2012

Profile of Equity Partner

Name :	Sichuan Chyy易游体育官网gdu Chyy易游体育官网ggong Construction Machinery Co., Ltd.
Head office :	Chyy易游体育官网gdu Economic & Technological Zone, Chyy易游体育官网gdu, Sichuan Province, China
yy易游体育官网tablished :	October 30, 2001
Capital :	140 million yuan
Salyy易游体育官网 :	2.4 billion yuan (in 2009)
Businyy易游体育官网s :	Production and salyy易游体育官网 of construction machinery (mainly wheel loaders)
Presidyy易游体育官网t :	Yang Jian Chuan
Employeyy易游体育官网 :	About 3,000

Signing ceremony yy易游体育官网th Chinese partner Sichuan Chengdu Construction Machinery
Construction of yy易游体育官网nd turbine in Weihai, Shandong Province		Foundation work in Shanghai