December 11, 2015
Sanyo Special Steel Co., Ltd.
Establishment of Formed and Fabricated Materials Company and Commencement of Formed andFabricated Materials Business in Mexico
Sanyo Special Steel Co., Ltd. (“Sanyo”, head office: Himeji-shi, Hyogo, President: Yasuo Takeda) has
resolved at its Board of Directors meeting held on December 11, 2015 to establish Sanyo Special Steel
Manufacturing de Mexico, S. A. DE C. V., a local subsidiary that will manufacture and sell formed andfabricated materials, and to commence the formed and fabricated materials business in the United
Mexican States.
Details
1. Objectives
The Mexican automotive industry has been developing as an export base to the United States.
According to the International Organization of Motor Vehicle Manufacturers, the automobile production
volume in Mexico is forecast to expand to around 5,000,000 units in 2020 from 3,200,000 units in 2014.
Against this backdrop, a number of Japanese and western bearing manufacturers have recently
entered the Mexican market, raising expectations for an increase in demand for the upstream processes
for producing bearings in Mexico over the medium- to long-term.
Under its 9th medium-term business plan (fiscal 2014 to fiscal 2016), Sanyo aims at strengthening
the non-steel business including the formed and fabricated materials business. The Company has been
implementing measures to expand the sales of the formed and fabricated materials business to 1.5 times
those in fiscal 2013. As part of its measures, it established Siam Sanyo Special Steel Product Co., Ltd.
(SSSP) in Thailand in September 2014. SSSP started commercial production in December 2015.
After its feasibility study on production in Mexico, Sanyo has decided to establish a manufacturing
company with an integrated production process from forging to machining to produce formed andfabricated materials. The Company will promptly build a supply-chain in a growing market byestablishing a manufacturing and sales base for formed and fabricated materials in Mexico and meet theneeds of customers to expand the global business, boosting the formed and fabricated materials business.
Sanyo Special Steel Manufacturing de Mexico, S. A. DE C. V. will become the first Japanesemanufacturer of formed and fabricated materials for bearings to introduce an integrated production
process from forging to machining in Mexico. It is equal in size to or larger than Ningbo Sanyo Special
Steel Products Co., Ltd. (NSSP), Sanyo’s main overseas base. Consequently, Sanyo will establish asystem that enables it to supply formed and fabricated materials to huge markets around the PacificOcean.
Meanwhile, the Company’s decision to advance into Mexico will result in having the Formed andFabricated Materials segment operate plants in six places: Japan (Santoku Tech Co., Ltd.), China(NSSP), the United States (Advanced Green Components, LLC), India (Mahindra Sanyo Special SteelPvt. Ltd.), Thailand (SSSP), and Mexico (Sanyo Special Steel Manufacturing de Mexico, S. A. DE C. V.).
Including an alliance with other companies, Sanyo will study to expand its product lineups and todevelop high value-added products by adding a heat treatment process to the integrated production
process to meet increasing and diversifying customers’ needs in the future.
2. Outline of the local subsidiary(1) Company name

Sanyo Special Steel Manufacturing de Mexico, S. A. DE C. V.

(2) Location

Industrial Park in the State of Guanajuato or the State of Jalisco,
the United Mexican States (planned)(3) President

Nobuyuki Tanaka (Director and Executive Vice President ofSanyo)(4) Business description

Manufacture and sale of formed and fabricated materials forbearings (forged products, turned products)
Note: Sanyo Special Steel Manufacturing de Mexico will
manufacture formed and fabricated materials by forging andmachining Sanyo’s steel products and sell them to bearing
manufacturers.

(5) Capital (note)

Approx. 5,000 million yen (after the capital increase)(6) Date of establishment(note)

November 12, 2015(7) Shareholders

Sanyo: 100.00%(8) Plant site area

Approx. 110,000 m(9) Main facilities

Forging machines, lathe turning machines(10) Production capacity

Approx. 2,000 tons/month (planned)(11) Employees

Approx. 450 persons (planned)(12) Date ofcommencement ofoperations

September 2017 (planned)2(Note) Sanyo will increase the capital of a company that was established for thefeasibility study (capital: 20,000 peso/approx. 140,000 yen).

(Reference)<Schematic view of the factory buildings><Location of the new company>

The State ofGuanajuato
The State ofJalisco<Examples of formed and fabricated materials for bearings>