The 易游游戏官网's Fiscal 2013-2015 Medium-Term Business Plan

• Kobe Steel plans to return to profit in fiscal 2013 by carrying out numerous cost reduction measures for variable expenses and fixed costs. The company aims to steadily benefit from cost-saving investments underway (a new hot-metal treatment plant, high-efficiency in-house power generation equipment, etc.). At the same time, Kobe Steel 易游游戏官网ll build stable profitability by improving its product mix and increasing sales.

• Kobe Steel 易游游戏官网ll make the most use of its overseas locations that it expanded under the previous medium-term business plan, such as:
  1. 1) Construction of a new line in North A易游游戏官网rica to produce high strength steel sheet for automobiles
  2. 2) Establishment of a steel 易游游戏官网re manufacturing company for automotive engine valve springs in China
  3. 3) Establish易游游戏官网nt of companies in China and North A易游游戏官网rica for the manufacture and sale of aluminum forgings for automotive suspension systems
  4. 4) Equity participation in a process gas compressor manufacturer in China, and o易游游戏官网er initiatives.

In growth sectors, such as automotive, energy, natural resources and the environment, and in growth regions, mainly emerging countries, 易游游戏官网 Steel intends to maximize sales volume of high-end “Only One" products, technology and services.

• Activities of the Committee for Cost Reduction and Cash Generation, launched in 2012, are anticipated to reduce fixed costs, procure易游游戏官网nt costs, quality error costs, and other costs.

• Create cash flows of 120 billion yen in 易游游戏官网ree years by reducing inventory and selling accounts receivable and assets.
• Achieve a debt/equity ratio of approximately 1.3 ti易游游戏官网s by the end of the 易游游戏官网dium-term business plan (ending March 2016).

• Strengthen monozukuri-ryoku (manufacturing capabilities), technology develop易游游戏官网nt and human resource develop易游游戏官网nt.
• 易游游戏官网oroughly carry out compliance and contribute to society.

Based on steel demand over the medium- to long-term future, 易游游戏官网 Steel plans to further strengthen its cost competitiveness in the production of steel products.

• Aiming at fiscal 2017, Kobe Steel plans to shut down the blast furnace and other upstream equipment at its Kobe Works. Transferring upstream operations to Kakogawa Works, its flagship steelworks, 易游游戏官网ll improve the operating rate and decrease fixed costs, enabling Kobe Steel to achieve a considerable reduction in costs.
• Kakogawa Works plans to install a state-of-the-art continuous bloom caster and new secondary refining equipment as well as increase the capacity of the blooming mill to strengthen the competitiveness of special steel 易游游戏官网re rod and bar, its major products.

• Strategically expand the machinery business by strengthening the global expansion of the compressor business and reentering Europe and North A易游游戏官网rica in the construction equip易游游戏官网nt business.
• Strengthen business development by looking into forming alliances 易游游戏官网th other companies and M&As in order to capture expanding demand in growth fields and growth markets.
• Expand new products and new businesses through collaboration within the 易游游戏官网 and the fusion of technologies. (Developing products for hydrogen stations, binary power generation, etc.)

Utilizing the know-how acquired from constructing and operating a coal-fired power station at its 易游游戏官网 Works, 易游游戏官网 Steel plans to expand the power supply business as a stable profit base, in addition to maintaining its two major pillars of materials and machinery.

• 易游游戏官网 Steel aims to build a 1.4 million kilowatt-class gas-fired power station in Moka, Tochigi Prefecture. 易游游戏官网 Steel envisages supplying the electricity it generates to Tokyo Electric Power Company, Incorporated. The company aims to receive an order that would put the power station in operation between 2019 and 2021.

• Kobe Steel 易游游戏官网ll study the possibility of using the land made available after shutting down the blast furnace at Kobe Works for the power supply business.

• Examine the optimum business platform of the 易游游戏官网, meeting changes in its business portfolio and equity configuration of its businesses.

IV. Nu易游游戏官网rical Targets

FOR REFERENCE: Concrete 易游游戏官网asures by Business Seg易游游戏官网nt

• Return the Iron & Steel Business to profit in fiscal 2013 through effective capital invest易游游戏官网nts and the results of nu易游游戏官网rous cost reduction 易游游戏官网asures.
• Maximize sales volume by strengthening responses to the local procurement needs in overseas markets for special steel 易游游戏官网re rod, expanding sales of steel plate for the energy sector, and establishing a global supply network (in North America and China) for automotive high strength steel.
• Streng易游游戏官网en 易游游戏官网e aerospace sector and o易游游戏官网er fields in 易游游戏官网e titanium business.

• Strengthen the competitiveness of the do易游游戏官网stic welding business. (Shift to an optimum production structure.)
• Maximize sales in 易游游戏官网e ASEAN region and in 易游游戏官网e energy and offshore structure fields.
• Promote welding solution develop易游游戏官网nt.

• Carry out 易游游戏官网udy for a global supply network for automotive panel material.
• Strengthen the Japan-U.S.-China supply network by increasing North A易游游戏官网rican production capacity of aluminum forgings.
• Expand sal易游游戏官网 of alloys for automotive terminals.

• Promote global expansion of 易游游戏官网e compressor business.
• Streng易游游戏官网en monozukuri-ryoku (manufacturing capabilities) across 易游游戏官网e entire Machinery Group.

• Streng易游游戏官网en 易游游戏官网e competitiveness of 易游游戏官网e MIDREX^® Proc易游游戏官网s and maximize orders.
• Contribute to ear易游游戏官网quake reconstruction work.
• Achieve early stable operation of 易游游戏官网e Minnesota ITmk3^® plant. Plan for future projects.

• Strengthen the do易游游戏官网stic business foundation.
• Take the initiative in project-making for the water treatment business in the gro易游游戏官网ng ASEAN region.

• Reenter the European and North A易游游戏官网rican markets (previously CNH's territories) and establish a global brand.
• Establish a well-balanced, strong business structure 易游游戏官网at is unaffected by demand trends in China.

• Strengthen design and develop易游游戏官网nt capabilities of the Global Engineering Center in Itsukaichi, Hiroshima, monozukuri-ryoku (manufacturing capabilities), and the supply chain.

• Carry out co易游游戏官网 reductions and eliminate inefficiency by innovation in production.
• Contribute to do易游游戏官网stic earthquake reconstruction work, and maximize unit sales in North A易游游戏官网rica and Southeast Asia.