Kobe Steel's U.S. Aluminum Forging Unit to Boost Production of Automotive Suspension Parts.

Tokyo, Japan, June 1, 2006 - (JCN Newswire) - Kobe Steel , Ltd. announces that its U.S. subsidiary, Kobe Aluminum Automotive Products, LLC, will boost production of aluminum alloy forgings used in automobile suspension systems this year.

Last year, Kobe Aluminum Automotive Products (or KAAP) produced 370,000 pieces of aluminum forgings, which were supplied to American automakers and Japanese transplants. Owing to strong demand, production is forecast to increase to 1.3 million pieces in 2006.

"More cars are using aluminum alloy suspension arms owing to the lighter weight of the material, which helps improve mileage and performance," said KAAP President Takumi Fujii.

Tomorrow, KAAP will celebrate its official opening in Bowling Green, Kentucky (USA). Commenting on the occasion, Fujii said, "We're not just celebrating the opening of our plant. We're also marking the first year of a successful business. And this is just the beginning."

KAAP started production in June 2005 with one 6,300-ton mechanical forging press, a key piece of equipment. Over the past year, business has continued to grow. To meet increasing demand, KAAP installed a second 6,300-ton press, which started up in April this year. KAAP is currently installing a third forging press, slated for completion in December this year. When it goes into operation, KAAP's production capacity will triple in comparison to when it first started. Total investment costs, including the plant expansions, are anticipated to reach $65 million.

The suspension forgings that KAAP manufactures are upper arms and lower arms. They are made of KS651-T6, KAAP's own high-strength aluminum alloy, and 6061-T6 aluminum alloy. The arms range in weight from 5.7 lbs to 12.6 lbs.

Committed to excellence in quality and efficiency, KAAP has already obtained ISO 9001 certification. Its quality assurance system follows every step of the manufacturing process, from billet production and press forging to final treatment and inspection. With cutting-edge technology and decades of experience, KAAP supplies aluminum alloy suspension arms of the highest quality that consistently meet user requirements.

KAAP is relatively new in the United States, but is backed by its parent, Kobe Steel, Ltd., which has been serving the aircraft and automotive industries in Japan with its aluminum products since 1937. Kobe Steel is Japan's top producer of aluminum alloy suspension arms, with an estimated 80 percent share of the domestic market.

Fitted with more safety devices and options, cars have been growing heavier. At the same time, they need to be lighter to conserve fuel, improve mileage, and meet stringent environmental regulations. Automakers worldwide are using increasing quantities of lighter parts, including aluminum forgings for suspension systems. Additionally, Japanese carmakers are increasing their procurement of parts in the United States.

Kobe Steel concluded that a production base in North America would be essential to meet the increasing need for aluminum forged parts from both American and Japanese automakers. Kobe Steel and trading firms Mitsui & Co., Ltd. and Toyota Tsusho Corporation formed KAAP in 2003. Kobe Steel is responsible for manufacturing, while Mitsui and Toyota Tsusho are in charge of marketing.

About Kobe Aluminum Automotive Products, LLC

Kobe Aluminum Automotive Products is 60% owned by Kobe Steel, 25% by Mitsui & Co., Ltd. and 15% by Toyota Tsusho Corporation. Based in Bowling Green, Kentucky, KAAP employs 110 people. The President is Takumi Fujii.

KAAP's manufacturing facility covers 131,000 square feet and sits on 32.6 acres. The plant currently has a melting and holding furnace, a continuous casting machine, two 6,300-ton mechanical forging presses, two 300-ton mechanical trimming presses, a continuous heat treatment furnace, and an automatic penetrant inspection line.

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.
9-12 Kita-Shinagawa 5-chome
Shinagawa-ku, Tokyo 141-8688 Japan
Tel  [phone]
Fax  [phone]
E-mail  [e-mail]

In the United States:
Yutaka Mike Goto
Kobe Steel USA Inc.
New York, NY
Tel  [phone]

Takashi Kawana
Kobe Aluminum Automotive Products, LLC
Bowling Green, KY
Tel  [phone]

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