Progress Situation of Nippon Steel & Sumitomo Metal Corporation’s System Consolidation and Changes to Operations Structure

Oct. 13, 2013

Nippon Steel & Sumitomo Metal Corporation
NS Solutions Corporation

Progress Situation of Nippon Steel & Sumitomo Metal Corporation’s System Consolidation and Changes to Operations Structure

At the time of the merger in October 2012, Nippon Steel & Sumitomo Metal Corporation (Chairman & CEO: Shoji Muneoka; hereinafter “NSSMC”) prioritized the system consolidation of its general operations infrastructure. Since then, we have been conducting operations consolidation for the purpose of optimization and enjoying early consolidation effects, and system consolidation premised upon this. In other words, we have been examining and constructing a system that makes good use of the superior functions from the large-scale, complicated, and long-standing systems that both former companies had developed to support the steel industry, but furthermore is new and robust enough to be capable of supporting the new operations of the consolidated new company. More concretely, we are proceeding with system development relating to the management system for human resources and accounting, etc., which forms the foundation of the company’s management, aiming for full implementation in April 2014. Furthermore, regarding the consolidation of the sales system, which constitutes the backbone of our business, we are proceeding with a thorough examination of necessary requirements, aiming for full implementation in FY 2016.
At the current time, we are at the stage of having completed concretization for around one third of the entirety, and in order to accelerate future examinations and development, after much consultation with related parties, we have agreed upon the following with our affiliated companies regarding our system subsidiary regime responsible for operations and system development.

NS Solutions Corporation (Chuo-ku, Tokyo; President: Munetaka Shashiki; hereinafter, “NS Solutions”) has reached an agreement with NSSMC, IBM Japan, Ltd. (hereinafter. “IBM Japan”) and IS Information System Co. Ltd. (hereinafter, “aies”), that NS Solutions will gradually be entrusted with system operations of HQ and steelworks under the former Sumitomo Metal Industries Ltd. (hereinafter “Sumitomo Metal”), which are currently entrusted by NSSMC to IBM Japan and implemented by aies, by April 1, 2017 (approximately), based upon collaboration with IBM Japan.
In accordance with the entrustment of these system operations, all shares in aies held by IBM Japan and NSSMC shall be transferred to NS Solutions, aiming for April 1, 2017, and aies shall be consolidated into the NS Solutions Group.

NS Solutions, as the core company of the NSSMC Group’s system solutions business, shall be entrusted with these areas previously controlled by the former Sumitomo Metal, in addition to system operations for areas that were conventionally entrusted to the former Nippon Steel Corporation, and exert its utmost efforts toward the early demonstration of consolidation effects at NSSMC.

Reference: Outline of Each Company

Overview of NS Solutions Corporation:

-Representative Director & President:	Munetaka Shashiki
-Capital:	12,952,763,000 yen
-Head Office:	2-20-15 Shinkawa, Chuo-ku Tokyo
-Established:	October 1, 1980
-Net Sales:	172.0 billion (consolidated); 153.1 billion (non-consolidated) (FY ended March 2013)
-Ordinary Profit:	11.6 billion (consolidated); 8.5 billion (non-consolidated) (FY ended March 2013)
-Number of Employees:	4,985 (consolidated); 2,378(non-consolidated) (current as of March 2013)

Overview of IS Information System Co., Ltd.:

-Representative Director & President:	Kenji Miyajima
-Capital:	30, 000,000 yen
-Head Office:	Akashi-cho 6-4, Chuo-ku, Tokyo
-Established:	March 2000

Inquiries regarding this article:
Nippon Steel & Sumitomo Metal Corporation
Public Relations Center
Tel: 03-6867-2146,2147,2135,2977

NS Solutions Corporation
Public Relations & Investor Relations Group
Tel: 03-5117-6012