Metal One Metal One Coporation

September 18, 2007


Welded and Processed Products Manufacturing Company Launched in Hangzhou


Metal One Corporation (headquartered in Minato-ku, Tokyo; president: Moriji Kanada) established Hangzhou Metal One Steel Plates Processing Co., Ltd., a manufacturing company to supply welded and processed steel plates for construction machinery, in March 2007 in Hangzhou, Zhejiang Province, China. Construction commenced in May of this year, and the plant is scheduled to begin operating in November.

The global market for construction machinery (hydraulic shovels) was 160,000 units in 2006, and the industry forecasts a continuing annual 10% growth rate up to 2010. China, where demand has quadrupled over the past few years, is central to this. Against this backdrop of favorable demand for construction machinery, Japanese construction machinery manufacturers have established production sites to strengthen their manufacturing operations as part of their efforts to manufacture fully assembled cars for the domestic market in China and composite parts for export.

The new company that was launched in this environment will add depth to welded and processed steel plate operations targeted at the construction machinery industry and will aim to build a global value chain, outlined in our second Mid-term Consolidated Management Plan, by using a strong domestic foundation and the Group's overall capabilities. The new company's shareholding structure consists of an 85% equity holding by Metal One Corporation and a 5% investment each by Kobelco Construction Machinery Co., Ltd.; Keiyo Blanking Kogyo Co., Ltd.; and other firms, with US$6.1 million in capitalization and US$15.2 million in total investments. With a projected annual production capacity of 24,000 tonnes, Hangzhou Metal One Steel Plates Processing's main customer will be Hangzhou Kobelco Construction Machinery Co., Ltd. Incorporating the steel plate welding experience and expertise that the Metal One Group has cultivated over many years in Japan, the new company will endeavor to provide the same levels of quality and service that are available in Japan.

Outline of Hangzhou Metal One Steel Plates Processing Co., Ltd.

1. Name: Hangzhou Metal One Steel Plates Processing Co., Ltd.
2. Headquarters: No. 1, Avenue 22, Hangzhou Economic & Technological Development Area, Hangzhou, Zhejiang Province, China
3. Representative: Akira Mizukami, President (on assignment from Metal One)
4. Capitalization: US$6.1 million
5. Shareholders: Metal One Corporation (85%), Kobelco Construction Machinery (5%), Keiyo Blanking Kogyo (5%), others (5%)
6. Date of establishment: March 12, 2007
7. Start of operation: November 2007 (planned)
8. Number of employees: 85 (planned)
9. Size: Site-18,720 m2, plant-9,352 m2
10. Line of business: Welding and processing of steel plates for construction machinery
11. Equipment: 4 2-kW laser cutting machines 4 gas cutting machines
2 gas bevel cutting robots
2 beveling machines
2 bending presses
2 machining centers
1 bending roll
1 straightener
2 roll straighteners
2 welding robots
1 turning machine
12. Production capacity: 24,000 tonnes per year (projected)
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