Establishment of a Joint Venture to Manufacture and Sell Automotive Steel Sheets（Shanghai Baosteel-N

Today， Nippon Steel Corporation (President MIMURA Akio， NSC)， Baoshan Iron & Steel Corporation (President AI Baojun， Baoshan) and Arcelor (CEO Guy DOLLE) signed a Joint Venture Agreement to establish a company on Baosteel’s premises in Baoshan District， Shanghai， to manufacture and sell automotive steel sheets.

NSC and Baoshan， having earlier reached a basic accord to establish the joint venture to meet the demand for high-grade automotive steel sheets in China， for which medium- and long-term growth is expected， exchanged a letter of intent on July 22nd of this year. Detailed terms and conditions have been negotiated since then， and the Joint Venture Agreement has finally been signed.

Arcelor， which is in the Global Strategic Alliance with NSC， has appraised this project highly. As the three parties have reached a common understanding， Arcelor has decided to join the joint venture. NSC and Baoshan expect that Arcelor’s participation will contribute greatly to strengthening the competitiveness of the newly formed venture and help the venture secure an eminent position in the market by allowing it to respond more effectively to all kinds of needs of carmakers in China.

Through this joint venture， NSC will establish a global supply network of high quality steel sheets for automobiles and enhance services to the carmakers who are expanding their businesses globally. NSC is convinced that this joint venture will greatly contribute to the development of the Chinese steel and automotive industry.

As Baoshan has already started construction of the production facilities of the joint venture， the three companies plan to establish the joint venture company upon obtaining the approval of the Chinese government and start commercial operations in May 2005.

Outline of the joint venture company

Company name: Shanghai Baosteel-NSC/Arcelor Automotive Steel Sheets Co.，Ltd.
Business: Manufacture and sale of automotive steel sheets (cold-rolled sheets and hot-dip galvanized sheets)
Total investment: 6.5 billion Yuan
Registered capital: 3 billion Yuan
Equity: (Chinese capital) Baoshan 50%(Foreign capital) NSC 38%， Arcelor 12%
Location: On the premises of Baoshan in Baoshan District， Shanghai
Schedule: Production is expected to start in May 2005
For further information， contact:
Public Relations Center， General Administrative Div.
Nippon Steel Corporation (Phone: 03-3275-5022/5023)