Kobe, Kawasaki Create Manufacturing Joint Venture

Kobe Steel, Ltd. and Kawasaki Heavy Industries, Ltd. have agreed to transfer their remaining crushing equipment businesses to their joint venture, EarthTechnica Co., Ltd. The design and marketing portions of the crushing equipment businesses of the two companies have already been shifted to EarthTechnica.

The domestic aggregate market, the main market for the crushing equipment business, has been shrinking due to structural changes brought about by the decrease in public works and a recovery is difficult to foresee. Kobe and Kawasaki hold leading positions in Japan's crusher market. With their main products being highly competitive, their respective menus complement each other.

Kobe is involved in soil remediation, while Kawasaki supplies refuse paper and plastic fuel systems to the recycling field.

The joint venture, to which the marketing and design portions of the two companies' crushing equipment businesses were combined, started operations in July 2003.

In June 2004, Kobe and Kawasaki agreed to transfer the manufacturing of their crusher businesses to EarthTechnica.

This decision led to the signing of the corporate demerger agreement.

Through the merger, EarthTechnica will become an independent unit with marketing, design and manufacturing functions. In addition to the mutual use of sales networks, the improvement in product line-up, and the advantages of new product development, sales and technology, the joint venture benefits from higher production efficiency, lower supply costs, and the streamlining of duplicated functions.