Hitachi Metals, Ltd.

2004 News Release

June 23  

 

Hitachi Metals Establishes Tool Steels
Manufacturing and Sales Base in South China

—Expanding Sales in Response to Customer Demands—
—Delivering Product Quality and a Flexible Supply Structure—
Tokyo, Japan, June 23, 2004—Hitachi Metals, Ltd., announced today that it has established Hitachi Metals (Dong Guan) Specialty Steel Co., Ltd., a manufacturing, sales and marketing center for tool steels in South China, an area in which Japan’s corporate sector, particularly the automobile industry, is rapidly expanding its network. Hitachi Metals will work to expand tool steels sales in the Chinese market and to meet increasingly diverse customer needs through the prompt supply of products.

1. Background

The number of Japanese companies, particularly in the automobile and electric home appliances industries, operating in the south China region of Guangzhou is growing rapidly. Against this backdrop, demand for tool steels for use in molds and cutting tools is also expanding at an ever-increasing rate. As the importance of this market continues to grow, the need to meet customer demands for high-quality products and reduced delivery times through local procurement becomes critical.
To date, Hitachi Metals has serviced the Chinese market by exporting tool steels from Hong Kong and Taiwan. Supplementing these efforts is Hitachi Metals (Shanghai) Ltd., a sales base and marketing center established in October 2002. In addition, the Company opened a representative office in Guangzhou in July 2003 to further expand sales of tool steels and to provide technical support.
Recognizing this trend toward increased demand and the growing diversity of customer needs, Hitachi Metals realized the necessity to establish a flexible manufacturing base in China in order to deliver a prompt and stable supply of products and to secure cost competitiveness. For these reasons, Hitachi Metals established Hitachi Metals (Dong Guan) Specialty Steel Co., Ltd., a China-based company to manufacture (cutting, machining), heat treatment and market high-grade tool steels and to provide technical support.
Hitachi Metals (Dong Guan) Specialty Steel Co., Ltd. is capable of addressing small-lot requirements and as such is ideally placed to meet the fine-tuned needs of customers. Dong Guan is located on the eastern side of Zhu Jiang in Gunagdong province approximately 50 km from Guangdong and 90 km from Shenzhen. Leveraging the distribution merits of the area, Hitachi Metals plans to focus on maximizing its tool steels business in south China and to expand its market share in china.

2. New Company Profile

Hitachi Metals (Dong Guan) Specialty Steel Co., Ltd.

(1)Business Activities	:	Manufacture(cutting, machining), heat treatment and sale of high-grade tool steels
(2)Location	:	Chashan Town, Dongguan City, Guangdong Province, China
(3)Representative	:	Kenichi Adachi
(4)Established	:	June 7, 2004
(5)Capital	:	Approximately ¥500 million (Hitachi Metals 90%)
(6)Employees	:	Approximately 30
(7)Commence Shipment	:	January 2005 (planned)

3. Forecast Sales

Fiscal 2006

¥1.5 billion

Underpinned by its fiscal 2005 medium-term management plan, Hitachi Metals is striving to expand global sales of its principal products and to promote the optimum location of its manufacturing sites. The establishment of a base in China is seen as a first step in the expansion in Asia of the Company's tool steels business, a segment earmarked for significant growth.

Inquiries:

Product Inquiries:
	Ryuichi Kamoshita Specialty Steel Company, Hitachi Metals, Ltd. Telephone: +81-3-5765-4394 Facsimile: +81- 3-5765-8317
Press Inquiries:
	Akio Minami Corporate Communications Office, Hitachi Metals, Ltd. Telephone: +81-3-5765-4079 Facsimile: +81-3-5765-8312

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