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Accelerate the Deepening and Expansion of MISI Functions and Fields of Expertise

Marubeni-Itochu Steel Inc. was founded in 2001 and was a pioneer under a unique new business model for its industry - engineered through the spin-off and merger of the steel products divisions of major general trading companies ITOCHU Corporation and Marubeni Corporation. October 2006 marked the fifth anniversary of this transition, with those initial five years witnessing the spirited promotion of business operations aimed at emerging as a truly excellent and self-reliant corporate power. Backed by the valuable support of our shareholders, employees and friends, I am proud to report that we have succeeded in steadily expanding the scale and caliber of our business achievements since our launch as an independent corporate entity.

For MISI, last year marked the start of its second medium-term management program. Our business performance in fiscal 2006, the first leg of this three-year vision, was buoyed by a robust global economy and bullish steel market. The results included consolidated sales of ¥1.9 trillion and consolidated net profits of ¥33.6 billion, our highest increases in MISI income and earnings yet, further bolstering our revenue base and financial standing.

Fiscal 2007, the median year in our second management program, is being positioned as a "year of acceleration" in the push to both deepen and expand our functions and fields of expertise. In particular, we have our sights set on the goals of expanding marketing functions, enhancing growth vitality and strengthening financial foundation. This year also promises to be characterized by our drive to turn up exceptional new investment targets while raising our existing outlays to reliable new earnings heights and continuing the promotion of investment in human resources. In these and other ways, we will be laying down strategies for an even brighter and more progressive future.

Likewise, stressing the importance of the ties with society forged to date, we remain faithful to the spirit of providing a Three-Way Benefit to the buyer, the seller and the local community. Working from this critical foundation, MISI will strive to achieve even greater eco-friendliness, strengthened compliance, social service and otherwise fulfill its role as a responsible corporate citizen.

We look forward to your redoubled support and understanding of MISI over the fiscal year to come.

October 2007

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