TYRE CORD AND SPRING ROD USERS BENEFIT FROM ANOTHER CORUS INVESTMENT

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TYRE CORD AND SPRING ROD USERS BENEFIT FROM ANOTHER CORUS INVESTMENT
14 May 2004 - Corus Automotive

Corus has announced a £14m (€21m) investment at its Scunthorpe rod mill in the UK. The investment will provide a state-of-the-art warehousing system and extensive mill enhancements, enabling the business to significantly improve its output of premium quality steels increasingly used by the automotive industry.

Corus’s high performance steel rod is the raw material for the fine wires used to strengthen vehicle tyres and is supplied to many of the world’s leading tyre producers. The steel must be of the highest quality so that it can be drawn into wires the thickness of a human hair, without breaking or losing its high strength. The rod is also used in the manufacture of engine valve springs which require stringent quality requirements. These components are in constant motion when the engine is running making them one of the most demanding applications for any steel. Around 80,000 tonnes of rod a year goes into this market, but very few manufacturers can supply steel of the required quality.

Peter Hogg, Director, Wire Rods, says: 'This major investment reflects the potential of the rods business. It will allow us to supply more high grade rod to meet the growing demand for increasingly sophisticated steels across the globe from the automotive industry.'

The mill’s new distribution facility will store rod coils in individual compartments, protecting them from damage. The new facility will be world’s best standard, and is the first of its kind in any European mill.

Together with enhanced product testing capability it will permit more rapid and precise shipment of material to automotive customers.

Investment in mill modifications will bring improvements all the way along the rolling process. These will enable the mill to consistently produce rod with better surface quality, higher tolerance and improved mechanical properties.

With the markets for premium rod growing, Corus is keen to expand its current portfolio of high quality steels. Its major investment projects will result in a significant improvement in the quality of rod despatched from the mill.

Andrew Page, Managing Director of Corus, Construction & Industrial, of which Wire Rod is a key part, says: 'The investments in Wire Rod are part of a £44m package of linked investment to the Scunthorpe operation. New steelmaking equipment will increase the plant’s capacity for higher value steels and provide the foundation and focus for Corus to competitively satisfy future demand from the most demanding customers and applications.'

Peter Hogg adds: 'There is a great deal of potential in the Wire Rod business, and we are delighted that this investment will give us the opportunity to build on our strong position in the market and differentiate our position in the supply chain. We have ambitious plans for the future, and everyone is looking forward to the challenge.'

About: Corus Automotive
Corus is one of the leading suppliers of steel products, services and technology to the automotive industry. A broad range of Corus steel from strip, engineering steels, special strip and tubes are used to make products that go into automotive applications including body-in-white, closures, chassis and suspension systems, powertrain, seats, safety systems and other components. Corus is committed to the global automotive industry, and, uniquely, combines its materials and vehicle engineering knowledge to respond cost-effectively to key drivers of importance to the sector, such as safety, fuel-efficiency, innovation and the environment. The Company actively supports supply chain initiatives that improve efficiency and enhance the value of steel used in automotive applications.

Corus Group Plc is one of the world's largest metal producers with an annual turnover of £8 billion and major operating facilities in the UK, the Netherlands, Germany, France, Norway and Belgium. Corus' four divisions comprising Strip Products, Long Products, Distribution & Building Systems and Aluminium provide innovative solutions to the construction, automotive, packaging, mechanical engineering and other markets worldwide. Corus has 48,500 employees in over 40 countries and sales offices and service centres worldwide. Combining international expertise with local customer service, the Corus brand represents quality and strength.

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