Basic Agreement Regarding Consolidation of Steelmaking Plants

Mar. 27, 2003

 Since December 2002, Kawasaki and JP Steel Plantech Co. (JSP) have been considering a broad-sweeping alliance to strengthen their steelmaking plant businesses. In March, both companies concluded a basic agreement to consolidate their operations.
 As the first step, Kawasaki’s Steel Plant Sales Group merged with JSP on April 1, 2003.

 We are scheduled to decide the details of consolidating our engineering operations with JSP by April 2004.

 JSP’s operations mainly cover the construction of blast furnaces, sinters, electric furnaces, continuous casters, and steel bar and rod rolling mills. This consolidation with our sales department will add Kawasaki’s basic oxygen furnace plants, hot and cold rolling mills and processing lines to the product lineup. The availability of all types of steelmaking plant equipment from upstream to downstream manufacturing stages, for either integrated steel mills or mini mills, makes it possible to respond to the needs of a diverse range of customers inside and outside Japan. With enhanced sales capabilities overseas, the new JSP will further strengthen its order-taking activities mainly in China, South Korea, Taiwan and other areas in Southeast Asia.

 Aiming to make the consolidation most effective, and to establish a solid presence in the world market, Kawasaki and JSP will further examine their strategies for products and marketing in addition to making full use of synergy. Furthermore, the new JSP will create a framework to steadily secure annual sales of 36 billion yen while enhancing technological prowess and cost-competitiveness.