Alliance between Nippon Steel and Sumitomo Metals

Nippon Steel Corporation (place of business: Chiyoda-ku， Tokyo； President: Akira Chihaya) and Sumitomo Metal Industries， Ltd (place of business: Chuo-ku， Osaka City； President: Hiroshi Shimozuma) have agreed today that they will pursue collaboration to improve their competitiveness. The two companies will set up a ”Cooperation Promotion Committee (provisionally named)” consisting of members from both companies to explore specific areas for alliance.
Anticipating future changes in steel demand and growing international competition， this collaboration aims to provide both Nippon Steel and Sumitomo Metals with benefits through implementation of the alliance.

Areas for alliance that the two companies have agreed to study follow below. Other areas could be added if future discussions determine they would be advantageous to both companies.


【Areas of the Alliance】

1. Mutual support in iron & steel making and down-stream departments
? Sumitomo Metals plans to study on structural reform of production system at Wakayama Works for flat products， in order to improve competitiveness of its steel business dramatically. Nippon Steel will study jointly with Sumitomo Metals possible cooperation for the above reform to be conducted by Sumitomo Metals.

? In connection with the above study， Sumitomo Metals intends to study on effective utilization of iron-making and steel-making facilities at Wakayama Works and Nippon Steel will collaborate with Sumitomo Metals on that study.

? Both companies will study on mutual supply of iron/steel during blast furnace refurbishment and case of emergency， and mutual supply of products at down-stream departments as the need arises.

2. Collaboration in stainless steel flat products business

Both companies will study structures and measures for strengthening profitability of stainless steel flat product business including forming a joint venture therefor.

3. Study on mutual cooperation in further cost-cutting endeavors in the following areas；

?Transportation of steel products
The two companies will pursue mutual collaboration in effective utilization of transit bases， ships， trucks and so forth.

?Raw materials procurement
The two companies intend to cooperate to reduce cost of raw materials procurement and storage of inventories.

?Cooperation between nearby places of operation
The two companies (including their affiliated companies) plan to cooperate in cutting various costs related to the operation of the steel works between their nearby places of operation (Kimitsu Works / Kashima Works).


Through the study and execution of cooperation in the above areas， Nippon Steel and Sumitomo Metals remain competitors as independent companies， and at the same time build cooperative relationships that strengthen their competitive edge.