Kobe Steel Plans 77% Higher Capital Expenditure in F2006

Kobe Steel announced on Tuesday the firm plans to increase its non-consolidated capital investment by 77% to 110 billion yen at construction base in fiscal 2006 ending March 2007 from the previous year. The capital investment exceeds 100 billion yen for the first time in 14 years since fiscal 1992. The firm will apply 82 billion yen to iron & steel business field in fiscal 2006, increasing by 95% from fiscal 2005, for production reinforcement including blast furnace relining and increasing output of high grade steel products.The outlays are scheduled to increase by 63% to 88 billion yen in fiscal 2006 from fiscal 2005 and by 66% to 63 billion yen for iron & steel business field. The depreciation will become to 57 billion yen totally and to 41 billion yen for iron & steel business field in fiscal 2006, compared with estimated 52 billion yen and 35 billion yen respectively in fiscal 2005.Kobe Steel plans to reline no.2 blast furnace at Kakogawa works and to construct no.5 continuous caster at Kobe works with the investment. The firm will expand the furnace capacity of no.2 blast furnace at Kakogawa from 4,550 cubic meters to 5,400 cubic meters with 40 billion yen of total investment. The construction started in September 2004 and will complete in March 2007. The firm invests 35 billion yen for the plan in fiscal 2006. No.5 continuous caster at Kobe works is constructed with 8.5 billion yen of total investment, of which the construction period is scheduled from April 2004 to August 2006. Kobe Steel invests 3.9 billion yen in fiscal 2006. In fiscal 2006 Kobe Steel also plans to refresh finishing and inspection line for steel bar at Kobe works with 1 billion yen of investment.Kobe Steel plans to increase its consolidated 3-year outlays to 340 billion yen in fiscal 2006-2008 from 240 billion yen in fiscal 2003-2005.