Nisshin Steel Co Ltd and Nippon Metal Industry Co Ltd have entered into a basic agreement to begin the consideration for integration of their businesses targeted for October 1st 2012, assuming that the companies obtain the approvals such as approvals of their respective shareholders at the shareholders' meeting and approvals of relevant authorities including the Japan Fair Trade Commission.

The companies will give concrete considerations to the Business Integration in the spirit of equal partnership.

1. Background and Objectives of Business Integration
In order to strengthen the cost competitiveness in the stainless steel business, from 2004, the companies have promoted various cooperative measures such as production consignment and have achieved success. However, the business environment of stainless steel industry has been going through drastic changes in recent years due to the facts such as dramatic increase in production capacity of stainless steel competitors overseas, intensification of competition in the global market, reduction in demand for stainless steel in the Japanese market, popularization of imported steel materials and concerns against increase in import volume of imported steel materials. In order to continue to enhance the corporate value of the Companies by expanding the business platform and by strengthening the stainless steel business and to continue to receive support from all stakeholders including the customers, shareholders and employees now and hereafter under such circumstances, the Companies believe that it is indispensable for them to further tighten their relationship and have come to an agreement on the Business Integration.

Goals to be Achieved after Business Integration
The new company created as a result of Business Integration will endeavor to achieve the following goals in order to develop a firmer business platform by integrating business resources, to become No 1 manufacturer in stainless steel business in Japan overall (i.e., technology, development, marketing and earnings), to make a leap to become one of the top stainless steel manufacturers in the world and to ensure stable product quality, cost and service to domestic and oversea customers