Strengthening the Corporate Foundation

「In February 2026, we acquired shares in 日本高周波鋼業株式会社 and made it a wholly owned subsidiary. To maximize synergies, including improved production efficiency, with 日本高周波鋼業株式会社, which has newly joined our group, we will pursue optimal production allocation encompassing its main plant, the Toyama Works.」

「To address these issues, we will also work to strengthen the financial foundation by introducing working-capital management, enhancing CCC (cash conversion cycle) management and using ROIC for investment decisions.」

「As we improve the efficiency of the Chita Plant's integrated process, expand high-alloy melting capacity at the Shibukawa Plant and increase high-performance materials production capacity at the Hoshizaki and Chita No. 2 plants, we will optimize the allocation of management resources, including personnel, equipment and capital, to establish an efficient and resilient production process suited to the new portfolio.」

「On the production side, to capture robust demand for stainless steel, we will invest in improving upward production flexibility, primarily in the steelmaking division of the Chita Plant, as a supplement to the strategic investments implemented under the 2020 medium-term management plan. In response to the long-term decline in demand for specialty steel for internal-combustion engines, beginning with the current medium-term plan we will implement measures that contribute to lowering the break-even point, including consolidating production among our main plants, investing in productivity improvements and improving yield, thereby advancing production efficiency and cost reductions.」

「As orders recover, our group will expand operating revenue while restraining increases in inventories and pursuing cost reductions focused on fixed costs, and will continue its business activities to generate stable cash flow.」

「② Strengthening business resilience: Enhancing resilience to changes in the external environment」

「Although our group has seen a recovery in orders, we expect the challenging operating environment to continue. We will press ahead with thorough cost-reduction measures focused on fixed costs and continue our business activities to generate stable cash flow.」

「With regard to capital investment, we are selectively making investments to strengthen the earnings base of existing businesses such as specialty steel products, as well as strategic investments in growth fields and new businesses.」

「As a special initiative contributing to the realization of the Basic Policy described in ①, we are pursuing portfolio reform, shifting from structural materials to functional materials, strengthening the business foundation by improving the break-even point and management structure, and rebuilding the business.」

「Regarding the steel products business, which forms the foundation of the business as a whole, we will work to secure customers' understanding of price adjustments necessitated by higher prices for various materials, while implementing thorough cost reductions to secure appropriate margins that enable sustainable production. We will also improve the efficiency of existing facilities, increase overall yield and streamline logistics, with the aim of maximizing production throughput.」

「As a special initiative contributing to the realization of the basic policy described in ① concerning the appropriate form of control over decisions on our financial and business policies (the “Basic Policy”), we are pursuing co-creation with customers, focusing on growth areas, strengthening QCD competitiveness and strengthening our corporate foundation.」

「As a special initiative contributing to the realization of the Basic Policy described in ① concerning the appropriate form of control over decisions on our financial and business policies (the “Basic Policy”), we are pursuing co-creation with customers, focusing on growth areas, strengthening QCD competitiveness and strengthening our corporate foundation.」

「As a special initiative contributing to the realization of the basic policy described in ① concerning the appropriate form of control over decisions on our financial and business policies (the “Basic Policy”), we are pursuing co-creation with customers, focusing on growth areas, strengthening QCD competitiveness and strengthening our corporate foundation.」