October 07, 2008

Kobe Steel plans JPY 92 billion CAPEX in fiscal 2008

Kobe Steel Ltd plans capital investments of JPY 92 billion in fiscal 2008 ending March 31st 2009 to carry out projects to improve its line up of upper end products and upgrade its manufacturing capabilities to increase the competitiveness of the company.

Most of the investments are in the steel segment.
1. At the Kakogawa Works, it plans to increase sintering capacity.
2. Increase the production capacity at the Takasago Works' Steel Casting and Forging Plant, which makes crankshafts for large ships
3. An environment related investment is the installation of denitration equipment at the sintering plant in the Kakogawa Works.

Capital investments in fiscal 2008 will be less than the JPY 114.6 billion spent in fiscal 2007. Much of the higher capital expenditure last year went to refurbishing and rebuilding two blast furnaces, one at the Kakogawa Works and the other at the Kobe Works.

Construction costs and outlays

	FY '07	FY '08	change
Construction costs	114.6	92	-0.2
Iron & Steel only	94	69	-0.27
Outlays	112.4	110	-0.02
Iron & Steel only	85.8	88	0.03
Depreciation	76.4	94
Iron & Steel only	57.7	67

(In JPY billion)

Investments by segment

	FY '07	FY '08
Iron & Steel	94	69
Aluminum & Copper	12.4	12
Others	8.2	11
Total	114.6	92

Main projects for fiscal 2008:
1. Kakogawa Works

Project:	Increasing sintering capacity
Products:	Steel sheet, plate, wire rod, etc.
Amount in FY2007:	2.8 billion yen
Total investment:	2.8 billion yen
Construction period:	:April 2007

2. Kakogawa Works

Project:	Installation of denitration equipment at the sintering plant
Products:	Steel sheet, plate, wire rod, etc.
Amount in FY2007:	3.3 billion yen
Total investment:	15.0 billion yen
Construction period:	:December 2007-March 2010

3. Takasago Works:

Project:	Increasing production capacity of steel castings & forgings
Products:	Marine crankshafts
Amount in FY2007:	2.5 billion yen
Total investment:	30.0 billion yen
Construction period	:July 2008 - March 2010