Strengthening the Competitiveness of Domestic Integrated Steel Mills

「As part of our pursuit of an optimal production system, we will suspend one continuous annealing line at the Kashima District of the East Nippon Works by the end of fiscal 2027.」

「While steadily improving baseline operating capabilities, we are suspending one ironmaking line, including Kashima Blast Furnace No. 3, in accordance with the roadmap for structural measures for production facilities. We are also upgrading the order mix and optimizing production capacity and fixed-cost levels.」

「During the fiscal year, we made selective investments in highly competitive facilities, including a next-generation hot-strip mill at the Nagoya Works and electrical-steel facilities at the Sakai District of the Setouchi Works and the Yawata District of the Kyushu Works. Together with the suspension of less competitive facilities, these investments have modernized, streamlined and improved the efficiency of our production facilities, promoted higher-grade product offerings, and helped optimize production capacity and fixed-cost levels.」

「As standalone crude-steel production has declined by 30% from its post-2012 business-integration peak, we have worked to build an earnings structure that does not rely on volume by fundamentally improving the break-even point through higher unit contribution margins and substantial fixed-cost reductions.」

「We are building an optimal production system for our domestic steelmaking business based on three policies: "upgrading our order mix through proactive investment in strategic products," "modernizing equipment to reliably convert technological capabilities into earnings," and "streamlining and improving the efficiency of our production system by selecting which products and equipment to retain." We are strengthening our earnings base by rebuilding cost competitiveness that surpasses our competitors and securing appropriate margins.」

「By making strategic investments in products, upgrading equipment to reliably convert technological capabilities into earnings, and streamlining and improving the efficiency of the production system through selective decisions on products and equipment, we will build an optimal production system for our domestic steelmaking business. We will also strengthen our earnings base by rebuilding cost competitiveness that surpasses our competitors and securing appropriate margins.」

「Our domestic mother mills continue to evolve by strengthening their manufacturing capabilities and serving as bases for technological development and cost and productivity improvements, while providing a stable supply of steel products to Japan and overseas and supporting our overseas businesses.」

「Through implementing the 2020 Medium-Term Management Plan, our group will continue to strengthen the manufacturing capabilities of our domestic mother mills.」

「With respect to strengthening equipment, we will further increase the capital investment raised under the 2017 Medium-Term Plan by approximately ¥100 billion per year and actively promote the refurbishment of blast furnaces, coke ovens and other facilities, as well as the introduction of state-of-the-art equipment.」

「To strengthen the competitiveness of our integrated steel mills, we plan to invest and spend approximately ¥450 billion per year on domestic facilities, including major equipment upgrades such as coke ovens, measures to maintain and strengthen equipment integrity, and earnings improvement initiatives that enhance cost competitiveness.」

「We designated strengthening the competitiveness of our domestic integrated steel mills as a core management priority and established a policy of strengthening manufacturing capabilities in both equipment and people. We planned to invest ¥1.35 trillion in domestic facilities over the 3 years from fiscal 2015 through fiscal 2017.」