Kobe Steel and IBM Japan in Partnership to Enhance Information Technology Strategy and Business Operations

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Tokyo, Japan - 10 Sep 2001: Kobe Steel and IBM Japan today announced an agreementin which Kobe Steel will outsource its information systems development, maintenance and operations to IBM for 10 years in a deal worth approximately70 billion yen ($579 million) and to provide expanded IT services to other companies.

Under a memorandum of understanding signed by the two companies, IBM Japan will also take a 51% financial stake in Kobelco Systems Corporation, an IT subsidiary of Kobe Steel.

"Kobe Steel will outsource its IT systems business, currently provided by Kobelco Systems, to IBM Japan. IBM Japan and Kobelco Systems will work together to deliver IT services to Kobe Steel," said Mr. Takahide Ohara, General Manager of Corporate Planning at Kobe Steel.

"One of the aims of this collaboration is to increase Kobelco Systems' revenue from third-party companies, following on from proven success in this area," said Mr. Ohara. "The partnership enables Kobelco Systems to make good use of IBM Japan's marketing reach and advanced technology in expanding its external business. IBM Japan is planning to utilize Kobelco Systems' e-business skills as a part of its services offeringsto other companies," he added.

"IBM Japan has been seeking a partner with a proven track record with strong technical ability in customizing and implementing application systems -- particularly e-business systems -- in order to capture significant growth in the services business," said Mr. Satish Khatu, General Manager, IBM Industrial and Public Sector Services for Asia Pacific.

"Entering into business with a company such as Kobe Steel is an exciting venture for us. IBM's expertise in helping customers in Japan transform themselves through enhanced use of information technology can result in cost efficiencies and make our customers more competitive. We look forward to working together with Kobe Steel to make this a reality," he said.

Kobe Steel will partner with IBM Japan to carry out its plans for improving its information technology operations, reducing expenses, and strengthening its ability to offer information technology services to other companies. Kobelco Systems offers e-business applications for customer relation management (CRM), enterprise resource planning (ERP), and supply chain management (SCM).

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