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Signing of Definitive Agreement for Special Steel Manufacturing and Sales Joint Venture in India

Nov. 11, 2011


Sanyo Special Steel Co., Ltd.
Mitsui & Co., Ltd.


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Sanyo Special Steel Co., Ltd. ("Sanyo", head office: Himeji-shi, Hyogo, President: Nobuyoshi Fujiwara) and Mitsui & Co., Ltd. ("Mitsui", head office: Chiyoda-ku, Tokyo, President and CEO: Masami Iijima) has entered into a definitive agreement with Mahindra Ugine Steel Co. Ltd. ("MUSCO"), an Indian special steel manufacturer belonging to Mahindra Group, to jointly establish a joint venture for manufacturing and sales of special steel, for which further increase in demand is expected in India in the mid and long term.

MUSCO will transfer its Special Steel Division into a newly established wholly owned subsidiary. After the transfer, Sanyo and Mitsui are contemplating subscribing new shares of the subsidiary in order to form the joint venture. The transaction is subject to the receipt of regulatory approvals by relevant authorities.

India has made remarkable development in recent years amongst the fastest growing economies globally, and its domestic crude steel production is expected to grow by 8% on an annual basis. In particular, the special steel market is expected to grow further, driven by an increase in demand for special steel in various sectors including the auto sector.

Sanyo expects its future growth by steadily capturing growth in special steel demand in India through the joint venture.

Mitsui has focused on building and enhancing its presence across the value chains of manufacturing and sales of steel products in India, since its participation in the formation of a joint venture for manufacturing cold-rolled steel and galvanized steel in 2005. This transaction is also expected to strengthen its ties with the Mahindra Group, which is one of the biggest business groups in India, with diversified operations including the manufacture and sales of automobiles and tractors as its core business, and one of our important business partners in India. Mitsui expects further opportunity for collaboration with the group across various business sectors.

MUSCO, Sanyo and Mitsui will utilize their brands, technologies and networks in order to meet our customers' needs through the joint venture. MUSCO, Sanyo and Mitsui are expected to drive general management, manufacturing & technology and marketing functions of the joint venture respectively.

JV Company Profile

Business description Manufacturing and sales of special steel products
Major facility 45t Electric Furnace, LF-VD, 1200t Forging Press, Blooming Mill, Continuous Mill, Ring Plant
Plant site area 65 acres(approximately 263,000m2)
Employees Approx. 800
Investment ratio MUSCO: 51%, Sanyo: 29%, Mitsui: 20%
Location of steel plant Khopoli, Maharashtra, India

Mahindra Group Profile

Flagship company Mahindra and Mahindra Limited ("M&M")
Location Mumbai, Maharashtra, India
Managing Director Anand Mahindra (M&M)
Number of group companies Approx. 110
Business field Automotive, Farm Equipment, Financial Services, Steel Trading&Processing, Infrastructure, Hospitality, IT Services, Systech, Others.
Listed on Bombay Stock Exchange, National Stock Exchange of India, Luxembourg Stock Exchange and London Stock Exchange
Consolidated sales INR 370.3 Bil (approx. JPY 570 Bil) (M&M)
(FY ending March 31, 2011)
Capital INR 2.9 Bil (approx. JPY 4.5 Bil) (M&M)
(FY ending March 31, 2011)
Established in 1945

MUSCO Company Profile

Company name Mahindra Ugine Steel Company Limited
Location Mumbai, Maharashtra, India
Managing Director Uday Gupta
Employees Approx. 1,500
Business description Manufacturing and sales of special steel products and stamping business
Capital relationship M&M holding 50.69% of shares
Listed on Bombay Stock Exchange and National Stock Exchange of India
Sales INR 13.4 Bil (approximately JPY 20 Bil)
(FY ending March 31, 2011)
Capital INR 320 Mil (approximately JPY 500 Mil)
(FY ending March 31, 2011)
Established in 1962

(Note) After carving out the Special Steel Division, the Stamping Division is expected to remain in MUSCO

Location of JV Company

Location of JV Company

Notice:
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently available to it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Corporate Communications Division
Noriko Okamoto
Telephone: +81-3-3285-6645
Facsimile: +81-3-3285-9819
Sanyo Special Steel Co., Ltd.
Corporate Planning Department
Atsuko Suda
Telephone: +81-79-235-6005