Kawasaki Heavy Industries & Kobe Steel sign final agreement to form joint venture for crushing equipment

 TOKYO (February 3, 2003) - Kawasaki Heavy Industries, Ltd. and Kobe Steel, Ltd. announced they signed the final agreement to merge their crushing equipment business into a 50/50 joint venture. In October last year, Kobe and Kawasaki entered into a basic agreement and began working on the details of the merger.

 The joint venture will be named Earth Technica Co., Ltd. It will be established on April 1, 2003 and begin operations in July. The marketing and design portions of Kobe and Kawasaki's crusher businesses will initially be transferred to Earth Technica. Manufacturing will follow in the second half of fiscal 2004 (October 2004 - March 2005 period). Sales in the midterm future are anticipated to grow to 30 billion yen per year.

 With headquarters in Tokyo, the new company will have sales offices throughout Japan - in Sapporo, Sendai, Nagoya, Osaka, Hiroshima and Fukuoka. Earth Technica is anticipated to have approximately 120 employees. In July when operations begin, the joint venture will be capitalized with 200 million yen representing common stock and 100 million yen in additional paid-in capital. The president will be Kyoichi Yahagi, who is currently associate officer of Kawasaki's Crushing Plant Business Center. The vice president will be Fumiya Fujimura, who is currently general manager of Kobe Steel's Crushing Equipment Dept.

 Kawasaki and Kobe both hold leading positions in Japan's crusher market, and the merger will complement the respective product menus of the two companies. Both also market products in the environmental field. Utilizing their know-how in crusher technology, Kobe is involved in soil remediation, while Kawasaki supplies refuse paper and plastic fuel plants.

 The two companies see each other as ideal partners to further expand the crushing equipment business. Combining overlapping functions in marketing and design and differentiating production are expected to increase the profitability of the joint crusher business. The merger is also expected to strengthen the growing environmental business.

OUTLINE OF Kawasaki'S CRUSHING PLANT BUSINESS CENTER

Sales:	15.8 billion yen (FY1999)
	17.9 billion yen (FY2000)
	14.4 billion yen (FY2001)
Employees:	250 (of which 80 are in marketing & design)
Sales offices:	Yachiyo, Osaka
Plant & design locations:	Yachiyo, Chiba Prefecture

OUTLINE OF KOBE'S CRUSHING EQUIPMENT BUSINESS

Sales:	11.6 billion yen (FY1999)
	14.1 billion yen (FY2000)
	7.8 billion yen (FY2001)
Employees:	88 (of which 56 are in marketing & design)
	(Excludes those in common sections at Takasago Machinery Center.)
Sales offices:	Sapporo, Sendai, Tokyo, Nagoya, Niigata, Toyama, Osaka, Takamatsu, Hiroshima, Fukuoka
Plant & design locations:	Takasago, Hyogo Prefecture