Kobe Steel's Netherlands Unit Begins Production of Flux-cored Welding Wire for Carbon Steel.

Tokyo, Japan, Sept 19, 2007 - (JCN Newswire) - Kobe Steel , Ltd. (TSE: 5406) announces that its Netherlands-based subsidiary, Kobelco Welding of Europe B.V., has begun production of fluxed-cored welding wire for carbon steel. This type of welding wire is commonly used to weld ordinary steel, which is used in large quantities in shipbuilding and offshore marine structures, such as oil rigs.

Kobelco Welding of Europe started out by manufacturing flux-cored welding wire (FCW) for stainless steel in 1995. Production capacity is approximately 1,000 metric tons per year. However, with demand for carbon steel FCW growing in Europe, Kobelco added production capacity of 6,000 metric tons per year for this type of welding wire, investing 10.9 million euros (about 1.5 billion yen). This will enable Kobelco to produce a combined total of 7,000 metric tons of welding wires in 2008 when full production is anticipated to be achieved.

Tomorrow, Kobelco will celebrate the official opening of the new production lines at its plant in Heerlen, located in the southern province of Limburg. Attending the commemorative event will be Heerlen Mayor A.M.G. Gresel and over 160 guests. From Kobe Steel, Isao Aida, a Senior Managing Director of Kobe Steel and President of the Welding Company, will participate.

Meeting world demand for carbon steel flux-cored welding wire

The market for flux-cored welding wire for carbon steel has been growing rapidly in Japan, South Korea, and China. The supply side of carbon steel FCW continues to be tight. In Europe, active resource development in the oil and natural gas fields has led to a sharp demand for carbon steel FCW.

To meet this strong worldwide market, the Kobe Steel Group has been rapidly increasing its global supply capabilities. In Japan, Kobe Steel's Ibaraki Plant in Osaka has been adding capacity. Within this fiscal year (ending March 2008), it will achieve an annual production capacity of 70,000 metric tons.

Kobe Welding of Korea in South Korea is also increasing production capacity. In China, Kobe Welding of Tangshan Co., Ltd. will commence production of carbon steel FCW by the end of this year. Through these undertakings, the Kobe Steel Group's total production capacity of carbon steel FCW - in Japan and overseas - is anticipated to increase to approximately 120,000 metric tons per year.

Flux-cored welding wire consists of a steel sheath with flux in the middle. FCW is generally around 1.2 mm to 1.6 mm in diameter. Flux contains a deoxidant, slag generator, arc stabilizer, alloys, steel powder and other substances. Flux composition contributes greatly to the mechanical properties, welding workability and other capabilities of the welding wire.

Profile of Kobelco Welding of Europe B.V.

Managing Director:    Kimihiko Nakamura
Location:             Heerlen, Limburg, Netherlands
Established:          June 1994 (production start-up in December 1995)
Equity:               Kobe Steel 94.6%, Sojitz Group 5.4%
Business:             Production and sale of flux-cored welding wires
Production:           7,000 metric tons per year (from 2008)
Employees:            About 100 (including 2 Japanese)

About Kobe Steel, Ltd.

Kobe Steel is one of Japan's top manufacturers of aluminum and copper products. It is also a leading steelmaker in Japan. Other businesses include welding consumables, industrial machinery, engineering, construction equipment, and electronic materials. More information is available at: www.kobelco.co.jp

Source: Kobe Steel, Ltd.

Contact:

Gary Tsuchida
Publicity Group
Kobe Steel, Ltd.
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