Jul. 22, 2014

Nippon Steel & Sumitomo Metal Corporation
Nippon Steel & Sumikin Technology Co., Ltd.
Nippon Steel & Sumikin Kansai Industries, Ltd.
Kantoc Roll, Ltd.

Basic Agreement on Integration and Reorganization of
Railway-Related Business of the NSSMC Group's Companies


Nippon Steel & Sumitomo Metal Corporation ("NSSMC"; Representative Director and President : Kosei Shindo) hereby announces that its consolidated subsidiaries have agreed to jointly discuss business integration and reorganization on April 1, 2015. Nippon Steel & Sumikin Technology Corporation, Ltd. ("NSST"; Representative Director and President: Yoshiaki Nakamura) and Nippon Steel & Sumikin Kansai Industries, Ltd. ("NSKI"; Representative Director and President: Akira Kubo) have agreed to jointly discuss the integration and reorganization of their railway engineering businesses, while at the same time NSKI and Kantoc Roll, Ltd. ("Kantoc"; President and Representative Director: Kazuya Aoyagi) have agreed to jointly discuss the integration and reorganization as a manufacturing process company for Osaka Steel Works.

I.Integration and reorganization of railway engineering business

1. Background and purpose of the integration and reorganization
In Japanese market, in response to strong social interest in ensuring railway safety, increased attention is being given to the review of conventional maintenance management. This has resulted in identification of various needs in the maintenance area. In overseas markets, many plans to establish new railway networks are being developed. In addition to developing more functional and more reliable railway products, overseas railway companies are requiring supply of products and services that integrate maintenance support, risk management, and other tasks after the start of operations of a railway system.

The integration and reorganization of the railway engineering businesses of NSST and NSKI is aimed to contribute to safe and reliable railway transportation. A new integrated company and NSSMC's Railway, Automotive & Machinery Parts Unit will work together and provide integrated products that range from railway products to railway maintenance equipment.

2. Outline of the Business Integration and Reorganization 
1) Outline: NSST's railway engineering business of the Railway & Machinery Engineering Unit (excluding material experimented-related business) and NSKI's plant business (manufacture of railway maintenance equipment, etc.) will be integrated and reorganized as a newly-integrated railway engineering company.

2) Scheduled effective date for the reorganization: April 1, 2015 (Prospective)

3. Outline of a newly-integrated railway engineering company
1)Business activities: Railway engineering (Design, manufacture and sale of railway maintenance 　　equipment and maintenance support system) and railway vehicle testing and others
2)Offices and manufacturing bases: Osaka and Tokyo

4. Synergies from integration
The newly-integrated railway engineering company will share the railway-related business strategy with NSSMC and improve its railway vehicle maintenance technology, reinforce its capability to meet customers' demand and promote expansion and development of railway vehicle-related business based on its experiences in railway vehicle maintenance field and wide range of knowledge from NSSMC group.

-Developing package of products and services that extend from design, development to 　　　　　　maintenance support
-Developing data analysis software that supports enhancing safety management and riding comfort (including monitoring of vibration of each of bogie parts and detecting a breakdown signal)
-Proposing products and software that create synergies between vehicle parts and rail (including measuring equipment to check status of bogies and tracks and analysis of monitored data)

II.Integration and reorganization of an manufacturing processing business for Osaka Steel Works

1. Background and purpose of the integration and reorganization
NSKI's  business of machining and manufacturing of dies for forging and Kantoc's business of manufacturing forged rolls, both being operated at Osaka Steel Works of NSSMC's Railway, Automotive & Machinery Parts Unit, will be integrated. The integrated business will ensure and maintain the technologies and skills, closely cooperate with Osaka Steel Works and improve manufacturing capability and further enhance the product competitiveness.

2. Outline of the Business Integration and Reorganization
1)Outline: NSKI's business of machining and manufacturing of dies for forging and Kantoc's business of forged roll manufacturing will be integrated and reorganized as a newly-integrated manufacturing processing company for Osaka Steel Works
2) Scheduled effective date for the reorganization: April 1, 2015 (Prospective)

3. Outline of a newly-integrated manufacturing processing company for Osaka Steel Works
1) Business activities:    Machining, manufacturing of dies for forging, and manufacturing of forged rolls (including machining, heat treatment and inspection)
2) Offices and manufacturing bases: Osaka and Wakayama

[Outline of integration of a railway engineering company and a manufacturing processing company for Osaka Steel Works ("OSW")]

For inquiries, contact：
NSSMC Public Relations Center, General Administration Division
Tel: +81-3-6867-2977





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