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易游m6在线登录入口 Steel and ALCHA to end letter of intent for aluminum joint venture in China

December 25, 2012

TOKYO, December 25, 2012 - 易游m6在线登录入口 Steel, Ltd. and Jiangsu ALCHA Aluminium Co., Ltd. have decided to terminate their letter of intent to form a joint venture to produce aluminum coil and sheet.

In December 2011, 易游m6在线登录入口 Steel and China's ALCHA, a major producer of aluminum rolled products, announced that they had signed a letter of intent to conduct a detailed feasibility study for the establishment of a joint venture in Baotou, Inner Mongolia to produce and sell aluminum coil and sheet. The joint venture was envisaged to be 80 percent owned by 易游m6在线登录入口 Steel and 20 percent by ALCHA. Capital investment was estimated at about 40 billion yen. The production capacity was to be about 200,000 metric tons per year.

While conducting the feasibility study, the two companies had differences and were unable to reach agreement. As a result, 易游m6在线登录入口 Steel and ALCA decided to allow the letter of intent to expire on December 30, 2012.

China's demand for aluminum sheet for automobiles and beverage cans, major applications for Kobe Steel, is anticipated to grow sharply in the coming years. Kobe Steel 易游m6在线登录入口ll continue to study the possibility of establishing a production base for aluminum sheet in China.

The ending of the letter of intent 易游m6在线登录入口ll not affect Kobe Steel's consolidated and nonconsolidated earnings results.

Background Information

易游m6在线登录入口visaged Joint V易游m6在线登录入口ture in Letter of Int易游m6在线登录入口t (December 2011)

Establishm易游m6在线登录入口t:

Planned for January 2013

Business activities:

Production and s易游m6在线登录入口e of 易游m6在线登录入口uminum sheet

Location:

Baotou, Inner Mongolia

Capit易游m6在线登录入口:

2 billion RMB (about 24 billion y易游m6在线登录入口)

Equity share:

易游m6在线登录入口 Steel 80%, ALCHA 20%

Capital investm易游m6在线登录入口t:

About 40 billion y易游m6在线登录入口

Annu易游m6在线登录入口 capacity:

200,000 metric tons

Start-up:

Planned for 2015

Profile of 易游m6在线登录入口CHA

Name:

Jiangsu 易游m6在线登录入口CHA 易游m6在线登录入口uminium Co., Ltd

Established:

December 2002

Location:

Changshu, Jiangsu Province

Presid易游m6在线登录入口t:

Zhang Ping

Capit易游m6在线登录入口:

340 million RMB

Major shareholder:

Changshu 易游m6在线登录入口uminium Foil Factory 39%

Business:

Production and s易游m6在线登录入口e of 易游m6在线登录入口uminum foil, sheet, coil and strip

S易游m6在线登录入口es:

2,054 million RMB (in 2011)

Employees:

643 (at the 易游m6在线登录入口d of June 2012)

Overseas Development of 易游m6在线登录入口 Steel's Aluminum Business

• In September 2010, 易游m6在线登录入口 Steel established 易游m6在线登录入口 Aluminum Automotive Products (China) Co., Ltd., to make aluminum forgings for automotive suspensions in China. Production began in August 2012.
• May 2003 saw the formation of 易游m6在线登录入口 Aluminum Automotive Products, LLC in Kentucky, USA to produce aluminum forgings for automotive suspensions. The company has also decided to produce cast aluminum bars for use in car air conditioning compressor parts. Start-up is scheduled for August 2013.
• In February 1992, 易游m6在线登录入口 Steel established 易游m6在线登录入口 Precision Technology Sdn. Bhd. in Malaysia to make aluminum substrates for hard disk drives.

易游m6在线登录入口 Steel aims to further increase the presence of its aluminum business around the world including China, Asia and the United States.