Hitachi Metals, Ltd.

2006 News Release

April 17  

 

Hitachi Metals and Baosteel
to Establish Joint Venture for China Roll Business

—Manufacture and sale of cast rolls—

Tokyo, Japan, April 17, 2006— Hitachi Metals, Ltd. announced today that it has reached an agreement with Shanghai Baosteel Group (hereafter “Baosteel”) of China to establish the joint venture company “Bao Steel Hitachi Rolls (Nantong) Ltd.” for the manufacture and sale of cast rolls for hot strip mills. The companies will thereby meet growing demand for high-quality, high-performance rolls in the Asian market, led by the rapidly growing Chinese market.

1. Background

Crude steel production continues to grow sharply in China, reaching 350 million tons in 2005. Meanwhile, the steel industry is gradually shifting from a focus on increased production volume to the manufacture of high-grade products, such as hot rolled steel sheets or strips for use in automobile panels or electric appliance field, as well as energy-saving and efficient rolling operations. For these reasons, demand for high-quality, high-performance cast rolls , which are indispensable to the rolling of high-grade steel sheets or strips, is expected to undergo significant growth.

2. Characteristics of Hitachi Metals and Baosteel

Hitachi Metals holds Japan’s top share in the market for cast rolls, and is the industry’s leading corporate group in technological development capabilities. This is reflected, for example, in its position as a world pioneer in the development of high-speed compound rolls* and other roll technologies. With the state-of-the-art steel production facilities of Baoshan Iron and Steel Co., Ltd. and other group companies under its umbrella, Baosteel boasts China’s largest steel production capacity, and is China’s preeminent corporate group in the manufacture of high-grade sheet steel and other superior products.

3. Overview

In order to meet the expected significant growth in demand for high-quality, high-performance rolls, Hitachi Metals and Baosteel have reached an agreement to establish the joint venture company “Bao Steel Hitachi Rolls (Nantong) Ltd.” for the manufacture and sale of cast rolls in China.

Establishing the joint venture company will make it possible to expand production volume and shorten delivery times, thereby enabling companies to achieve greater stability in the supply of high-quality, high-performance cast rolls, even amid booming demand, to the Chinese market and other regions of Asia.

4. Overview of New Company (Planned)

(1) Company Name: Baosteel Hitachi Rolls (Nantong) Ltd. (2) Business activities: Manufacture and sale of cast rolls for hot strip mills (3) Location: Nantong Economic-Technological Development Area, Nantong City, Jiangsu Province, China (Approximately 100km upstream from Shanghai on the Yangtze River) (4) Representative: Chairman Hirokazu Tanaka President Kiyoshi Nishigaki (5) Establishment: First half of fiscal 2006 (Commence Shipment First half of fiscal 2008) (6) Capital: RMB 520million (Approximately ¥7.5billion) Hitachi Metals Group70%, Baosteel Group30% (7) Area: Land area 130 thousand square meters Building area 40 thousand square meters (8) Employees: Approximately 300 (fiscal 2010)

5. Sales Plan

????????????    Fiscal 2010: ¥6 billion/year

Customer Inquiries:
		Mikio Sakiyama Roll Company, Hitachi Metals, Ltd. Telephone: +81-3-5765-4325 Facsimile : +81-3-5765-8317
Press Inquiries:
		Akio Minami Corporate Communications Div., Hitachi Metals, Ltd. Telephone: +81-3-5765-4079 Facsimile : +81-3-5765-8312

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(Reference)

Notes:

* High-speed compound rolls High-speed steel rolls offer markedly improved performance and are mainly used for steel sheet rolling. High-speed steel rolls are manufactured with the centrifugal casting method or the continuous pressure casting (CPC) method.

High-speed compound steel roll

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