The Nisshin Steel Group has drawn up its 13th Medium-term Management Plan for the fiscal years 2001 through 2003. Under the last medium-term management plan, all Group companies worked in unison to fulfill the objective of establishing an operating foundation to secure profits within the short time frame of two years (fiscal 1999 and 2000). As a result, we attained improvements in annual revenues of 38 billion (on a non-consolidated base), an achievement substantially higher than the initial objective of 30 billion and we returned to consolidated profitability in fiscal 2000 ended March 31, 2001 for the first time since fiscal 1997 ended March, 1998. However economic conditions are rapidly becoming unpredictable as a result of deceleration in the United States economy in addition to stagnating consumer spending and weak private sector capital investment in Japan. Our customers are also becoming more selective in prowrement and global competition continues to intensify, particularly in the field of flat rolled steel products. Moreover, we are now faced with additional charges stemming from the mandatory implementation of new accounting standards, including increased reserves for retirement benefits. Considering such factors, a decidedly severe business environment is expected to persist for our industry. In response to these circumstances, on June 1, 2001, Nisshin Steel newly established "Flat-Rolled & Coated Steel Business Division", "Special Steel Division", and "Prepainted & Building Materials Division", and an organizational framework by which each of these business divisions, together with our existing "Stainless Steel Business Division", will pursue profit individually.Based on the Plan policy described herein, we will strive to establish a revenue foundation for each business organization and Group company and continue to be a Group that creates value for its shareholders. 1. Basic Policy (our corporate ideal) To survive amid intensifying competition, both domestically and internationally, Nisshin Steel and the Nisshin Steel Group will work to gain international competitiveness (in terms of both costs and quality of business) its primary objective. Hence, we will establish and administer the following corporate ideal, for which all business organizations and Group companies will strive.

1. Basic Policy (our corporate ideal)
To survive amid intensifying competition, both domestically and internationally, Nisshin Steel and the Nisshin Steel Group will work to gain international competitiveness (in terms of both costs and quality of business) its primary objective.

Hence, we will establish and administer the following corporate ideal, for which all business organizations and Group companies will strive.

2. Numerical Targets
Our future aim is to achieve annual income before special items of minimum 28 billion on a non-consolidated base and ROA of minimum 6%. However, under the current Plan, as a step toward these ultimate goals, we will adopt numerical targets of the following action plan.

	Future objective (non-consolidated base)	Action plan (fiscal 2003, second half)
		Non-consolidated base	Consolidated base
Income before special items	min. 28 billion/year	min. 20 billion/year	min. 24 billion/year
ROA	min. 6%	min. 5%	min. 4.5%

3. Principal Initiatives

* For attainment of international cost competitiveness and customer satisfaction, we will: 1) Reconfigure and implement our Sales Strategy. [Increase in sales:15 billion (non-consolidated base)] 2) Reform Production and Cost Structures. [cost reduction: 35 billion (non-consolidated base)] By implementing these initiatives, we will establish a corporate framework capable of securing a minimum of 20 billion in income before special items by the second half of fiscal 2003. * To improve corporate value of the entire Nisshin Steel Group, we will: 3) Reconfigure and implement our Group Strategy. * For speedier of management capable of swift adaptation to change and thorough implementation of profit-focused approach for each individual business, we will: 4) Implement Business Structural Reforms.

(1) Sales Strategy

1) High value-added strategy (specialization in fields of expertise)   We will expand the ratio of environment-friendly products and new products (those developed within the past 10 years) in the overall mix from the current level of 15% to 23% by fiscal 2003 year-end. [New products: ZAM, Alstar for fuel tanks, environment-friendly coated steel sheet with after-treatment, others] 2) Strengthening our ability to conduct customer-focused product development and marketing   We will develop new products that respond accurately to customer needs, implement proactive sales approaches, and promote new applications. At the same time we will work on a Group basis to introduce, market and sell processed products. 3) Revision and strengthening of our distribution systems   Through the allocation of funds and human resources we will revise and strengthen our distribution systems. 4) Shorter deliveries through full-fledged application of information technologies   Main System Innovation Group, which was formed on June 1, 2001, is reviewing our core systems and will work to enhance our competitiveness by shortening lead times.

(2) Reform of Production and Cost Structures

1) Attaining international cost competitiveness   To secure international cost competitiveness, we will strive to lower costs in each business segment and reduce variable costs by 22 billion/year, fixed costs by 10 billion, and depreciation costs by 3 billion, thereby achieving a total annual cost reduction of 35 billion (on a non-consolidated base) by the second half of fiscal 2003. 2) Workforce streamlining (achieving a non-consolidated workforce of 3,500 personnel)   We will continue to streamline our workforce as part of our efforts to enhance labor productivity, and configure a non-consolidated workforce of 3,500 and a consolidated workforce of 6,400 by fiscal 2003 year-end. 3) Securing competitiveness in flat rolled and coated steel sheets by upgrading our blast furnaces   We will reduce costs through such measures as improving hot metal ratio by upgrading the blast furnaces at our Kure Works, and enhance the product quality of our flat rolled and coated sheets by adding vertical bending processes to the No.2 continuous caster of our Kure Works, thereby securing competitiveness. 4) Optimization of production systems and discretion in capital investment   We will explore methods of optimizing our production systems, including equipment-specific consolidation of products. At the same time, within the limits of depreciation, we will implement cost reductions commensurate with investment viability, enhance product quality, and invest in facilities for environmental compliance.

(3) Group Strategy

1) Strengthening competitiveness for each Group company   We will reduce costs at Group companies directly linked to manufacturing costs of the Parent Company, while at the same time expand non-Parent generated sales of all Group companies (to min. 25 billion). 2) Improving the efficiency of Group managerial resources   We will work to improve the efficiency of overall Group managerial resources by consolidating common Group operations (pay roll, data systems, finance, procurement, etc.).

(4) Business Structural Reforms

1) Organizational reform based on a business division model (implemented starting June 1, 2001) and adoption of new human resource systems   On June 1, 2001, we implemented organization reforms based on a business division organizational model, through which we will strive for swifter responsiveness to customer needs through the unification of manufacturing and sales operations, and substantially increase profit by implementing self-contained management on an individual business segment basis (specifically, strengthening of revenue management and acceleration of decision making). Furthermore, to ensure the fulfillment of the initiatives included in this medium-term plan, we will revise our human resources systems to more closely reflect business results and accomplishments in employee compensation packages and reform our corporate culture. 2) Promotion of various alliances for strengthened international competitiveness 3) Reconfiguration of educational systems and strengthening career development   We will reconfigure our educational systems and strengthen human resources development so as to create a organization composed of a small number of elite professionals. 4) Pursuit of speedier management and higher operational efficiency through full-fledged application of information technologies

4.Reference

Outline of the Plan