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Kobe Steel to Increase Titanium Production Capacity; Capital Investments to Cover Upstream to Downstream Processes.

Tokyo, Japan, Jan 24, 2007 - (JCN Newswire) - Kobe Steel, Ltd. plans to invest a total of roughly 5 billion yen in four projects to upgrade and expand its titanium production facilities.

Kobe Steel will construct a new titanium melting shop at its Takasago Works in Hyogo Prefecture in western Japan to be completed in January 2008. It will also upgrade the counterblow hammer for closed die forging at Takasago and construct a new welded tube line at group company Kobe Special Tube Co., Ltd. in Shimonoseki, Yamaguchi Prefecture. Both projects are scheduled for completion in May 2007. Completed last month was an expansion of the continuous annealing-pickling line for titanium sheet at Kakogawa Works in Hyogo Prefecture.

The projects will increase the integrated production capacity of titanium mill products, enabling Kobe Steel to manufacture more titanium alloy forgings for next-generation aircraft engines and meet the growing demand in China and the Middle East for pure titanium products used in infrastructure projects. The capital investments cover Kobe Steel's titanium production facilities at all locations including Takasago Works, Kakogawa Works and Kobe Special Tube. Under its Fiscal 2006-2008 Medium-Term Business Plan, Kobe Steel is aiming to increase sales and add further value to its "Only One" upper-end products.

Japan's titanium industry has been undergoing strong growth in recent years, and production and shipments of titanium mill products are anticipated to be robust in fiscal year 2006, ending in March 2007. In addition to Japanese manufacturers, this trend is similar worldwide. Bolstered by rising aircraft orders and growing demand from the energy industries, demand for titanium products is brisk.

Kobe Steel pioneered Japan's titanium industry when in 1949 it became the first company to begin research and development of this material. With over a half century of experience, Kobe Steel is Japan's only integrated producer of titanium mill products with operations ranging from melting to mill product manufacturing. The company contributes to the development of industry by supplying a wide variety of titanium mill products. Information on Kobe Steel is available at: www.kobelco.co.jp

Upstream capital investment

1. Construction of additional titanium melt shop at Takasago Works

Location: Takasago, Hyogo Prefecture

Start-up: January 2008

The new melt shop will be built adjacent to the current melt shops to stabilize production and improve operational efficiency. Production capacity is anticipated to increase 30% to 40%. The new shop will use the company's proprietary "Kobe method" (vacuum arc remelting method), which makes possible the use of titanium scrap. Kobe Steel intends to make the new facility the most cost competitive melt shop in Japan. Kobe Steel has also started mulling a further capacity increase.

Downstream capital investments

2. Upgrade of the counterblow hammer for closed die forging at Takasago Works

Location: Takasago, Hyogo Prefecture

Start-up: May 2007

Investment: Computer control and stabilization of hammer blow energy

Japan's largest counterblow hammer is used to manufacture closed die forgings for jet engine disks. Supporting the growing aircraft business of Japan's heavy industry manufacturers, Kobe Steel is meeting the need for value-added titanium alloy forged products used in aircraft engine disks and other applications.

3. Higher production capacity of continuous annealing-pickling line at Kakogawa Works

Location: Kakogawa, Hyogo Prefecture

Start-up: December 2006 (already in operation)

The dedicated continuous annealing-pickling line for titanium sheet, the only one of its type in the world, went back into operation last month. Throughput capacity has increased roughly by 30%. The hot and cold strip mills, located adjacent and used in steel production, also roll titanium sheet. The proximity to the strip mills contributes to maintaining and improving the integrated quality assurance system for titanium sheet products.

4. Construction of new titanium welded tube line at Kobe Special Tube

Location: Shimonoseki, Yamaguchi Prefecture

Start-up: May 2007

The new dedicated line at Japan's largest titanium welded tube plant will increase production capacity by 30%. It will help meet demand from power plants in China, seawater desalination plants in the Middle East, and other applications. In addition to the higher production capacity, the layout will be improved, which will further increase productivity.

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.
Tel: +81-3-5739-6010
Fax :+81-3-5739-5971
E-mail: www-admin@kobelco.co.jp


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Date:Jan 24, 2007
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