Sales Company to be Established for Steelworks Plant and Equipment

February 09, 2001

NKK Corporation, Sumitomo Heavy Industries, Ltd. and Hitachi Zosen Corporation announced today that they have reached an agreement to pursue a broad alliance in steelworks plant and equipment business. The companies will work towards a future integration of their operations in this sector under the agreement. As a first step, the three partners will consolidate their sales departments into a new sales company to be established shortly.

The steelworks plant and equipment market has become fiercely competitive due to shrinking demand and the emergence of large foreign plant construction companies. The alliance was formed from a common perception among the partners of the need to build a new presence in world markets of the 21st century and to respond more quickly to varied customer needs, by reinforcing their sales forces, widening the range of products they are able to offer, and improving their technology and cost competitiveness.

All three partners have long track records in steelworks plant and equipment engineering, and enjoy high levels of trust and confidence among customers in Japan and other countries.

- NKK provides customers in Japan and overseas with various products that extend from ironmaking plants, steelmaking plants, strip processing lines and long products rolling mills. It is also strong in environmental technologies which will satisfy future demands of the steel industry and offers comprehensive engineering services, including access to the operations and quality-control software technologies developed for its own steelmaking division.

- Sumitomo Heavy Industries boasts some of the world's best technology in steelmaking, plate and sheet processing and bar and section rolling mills. It sells a wide variety of iron and steel manufacturing machines to Japanese and overseas customers, including continuous casters, skin pass mills, tension levelers and bars and wire rods rolling mills.

- Hitachi Zosen provides customers with plants and equipment featuring highly advanced technologies for the ironmaking, steelmaking and bars and shapes rolling industries in Japan and overseas, including sintering plants, pelletizing plants, continuous casters and section rolling mills.

The establishment of the sales company will substantially expand the range of products the partners are able to offer, providing customers with access to a full lineup of products and services, in the ironmaking, steelmaking, strip processing and long products rolling areas.

The three companies will also be moving forward with other programs designed to reinforce their organizations in preparation for integration:

- Mutual access to planning and design technologies
- Cooperation in research and development
- Cooperation on procurement
- Existing plant diagnosis, technical assistance and operational support

Profile of sales company
1. Name: TBA
2. Head office: Tokyo (tentative)
3. Capital: \200 million (tentative)
4. Investment:
NKK 34%
Sumitomo Heavy Industries 33%
Hitachi Zosen 33%
5. Start up: April 2001 (company to be set up in March)
6. President: To be selected from NKK
7.Major areas of business: Marketing and sales for plant engineering, equipment and construction for iron and steel industry
8. Size of operations: \30 billion/year (order volume)
9. Employees: Approx. 30

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For further information, please contact:

Mr. Ryousuke Nishiyama
Public Relations Department
NKK Corporation
Tel: +81-3-3217-2138

Mr. Akira Akahori
Public Relations Department
Sumitomo Heavy Industries, Ltd.
Tel: +81-3-5488-8219

Mr. Yoshihiro Kawai
Public Relations
Hitachi Zosen Corporation
Tel: +81-3-3217-8418