Kobe Steel, IBM Japan ink US$579m deal

SINGAPORE--Kobe Steel Ltd today announced a 70 billion yen (US$579 million) deal with IBM Japan, in which the former will outsource its information technology operations to IBM for 10 years.

Under the agreement, IBM will also get a 51 percent stake in Kobelco Systems Corporation, an IT subsidiary of Kobe Steel. Kobelco Systems offers e-business applications for customer relationship management (CRM), enterprise resource planning (ERP) and supply chain management (SCM).

"Kobe Steel will outsource its IT systems business, currently provided by Kobelco Systems, to IBM Japan. IBM Japan and Kobelco Systems will work together to deliver IT services to Kobe Steel," said Takahide Ohara, general manager of corporate planning at Kobe Steel, in a statement.

"The partnership enables Kobelco Systems to make good use of IBM Japan's marketing reach and advanced technology in expanding its external business. IBM Japan is planning to utilize Kobelco Systems' e-business skills as a part of its services offerings to other companies," Ohara added.

One of Japan's leading steelmakers, Kobe Steel also has businesses in industrial machinery, urban infrastructure, plant engineering services, electronics and information systems. In the year ended March 2001, the company--which has 30,129 employees--posted consolidated sales of 1,373 billion yen.