[Outline of Ryowa Steel Corporation]

Headquarters: 6-12-1 Minamise, Kurashiki-shi, Okayama; Tel: +81-86-455-5151 Established: 1968 Capital: ¥150 million (Metal One: 100%) President: Masashi Mitani Number of employees: 62 Main businesses: Processing and sale of steel plates and sheets Sales amount: ¥10.6 billion (year ended December 2003) Site area: 26,700 m2

Ryowa Steel was established in 1968 as a processing center capitalized 100% by Mitsubishi Corporation and with the aim of delivering hot-rolled/cold-rolled/surface-coated steel plates and sheets to Mitsubishi Motors Corporation's Mizushima Plant and its business partners. Subsequently, the company's three plants were equipped with large slitters and other machinery, and Ryowa Steel grew into a major company with an annual processing output of 240,000 tonnes. In 2003, a major renewal project to revamp in-house distribution was launched in an effort to increase distribution efficiency by expanding the No. 3 plant and the coil (base material) yard facilities and changing the layout of the facilities.

President Masashi Mitani, who became President in August 2004, launched a policy aimed at continuously boosting the company's efficiency, stating: "The time will come when we will need a structure capable of handling an annual production level of more than 300,000 tonnes. We will thus have to find ways to increase the productivity of each person and the number of processes per hour."

As part of this initiative, the company is implementing "own-base development," where workers determine which type of activities generate profits within their own sphere of operations and where the employees are expected to take a pro-active role in "creating a plant where plant and equipment investment blends in well with the technical skills of the workers," according to President Mitani.

One of the three business models proposed by President Mitani is the further strengthening of the relationship with Mitsubishi Motors. In concrete terms, this model consists of a sales policy under which not only ordinary steel plates and sheets but also many other products such as specialty steel and steel pipes are handled. The second business model is to identify and develop business opportunities that lie in the areas between blast furnace manufacturers and users in the process of the development of SCM (Supply Chain Management). Finally, the third business model is the development of supporting business overseas, mainly in China, using Ryowa Steel as a base. Ryowa Steel is currently conducting personnel exchanges with the Metal One Group's Shenzhen Baoling Tongli Co., Ltd., in Shenzhen, China. As car manufacturers expand their operations in China, coil centers in the area are expected to play an increasingly important role, and President Mitani is eyeing overseas operations "not only from the viewpoint of operating as materials supply bases that can offset shortages in the area, but also from the aspect of possible collaborations that would encompass human resources and technological know-how."