Establishment of a Special Steel Manufacturing and Sales System in Indonesia

「The Indonesian overseas business reported higher profit due to increased sales volume, as well as improvements in selling prices and costs, although」

「インドネシア海外事業は数量増に加え、売価・コスト改善により増益だったものの、国内事業は数量減に伴う室蘭コンビナート全体での生産性悪化に加え、高炉トラブル・火災事故による操業度低下が重なり、大幅減益となりました。」

「The Indonesian overseas business reported higher profit due to increased sales volume and cost improvements, although」

「In the Indonesian overseas business, sales volume declined and revenue fell due to sluggish automobile sales associated with higher interest rates and other factors.」

「The Indonesian overseas business reported higher profit due to lower scrap prices and other factors. In Japan, however, profit declined because sales volume fell and the positive effect from using inexpensive raw-material inventories acquired before the price surge in the same period of the previous year disappeared, among other factors.」

「The Indonesian overseas business reported higher profit, partly due to lower scrap prices. In Japan, however, profit declined due to lower sales volume, the use of raw-material inventories acquired before the market downturn, higher costs associated with the weaker yen, inventory write-downs, and other factors.」

「The additional acquisition of these shares is intended to strengthen the financial base of PT. JATIM TAMAN STEEL MFG. Following the additional acquisition, our voting-rights ratio in PT. JATIM TAMAN STEEL MFG. changed from 66.54% to 74.98%.」

「The Indonesian overseas business reported higher profit as higher scrap prices were increasingly passed through to selling prices and increased production had a positive effect.」

「The Indonesian overseas business reported higher profit due to reductions in manufacturing costs and fixed costs.」

「The Indonesian overseas business reported higher profit due to increased sales volume and reductions in manufacturing costs and fixed costs.」

「Progress on the recovery plan for JATIM in Indonesia ・Return to operating profitability from the second half of fiscal 2020. ・Yields for round steel improved to the target level, comparable with flat steel, and stabilized. ・In fiscal 2020, price competitiveness was strengthened through workforce reductions, salary cuts, and other reductions in fixed costs.」

「In the Indonesian overseas business, although it was affected by COVID-19 from the second quarter, April to June, the effects of initiatives to reduce manufacturing costs and fixed costs, together with the lower depreciation burden following the impairment loss recorded in the previous fiscal year, resulted in a substantial narrowing of the loss.」

「In the Indonesian overseas business, the impact of COVID-19 was limited in the first quarter, from January to March. In addition, manufacturing costs improved through higher yields and other factors, while the depreciation burden declined following the impairment loss recorded in the previous fiscal year, resulting in higher profit.」

「At the consolidated subsidiary PT.JATIM TAMAN STEEL MFG., the production site, the company achieved an improvement of ¥500 million in the second half compared with operating profit in the first half of 2019, establishing a basis for a return to operating profitability.」

「At a meeting of the Board of Directors held on 6 February 2020, we resolved to subscribe to the third-party allotment of shares to be conducted by our consolidated subsidiary, PT.JATIM TAMAN STEEL MFG. We have positioned the steel business in Indonesia as a core business in our ASEAN strategy. To improve quality and cost competitiveness further by expanding sales of round steel and, through synergies with the spring business, expanding sales of flat steel, we decided to subscribe to the third-party allotment to strengthen capital and our financial base.」

「In the Indonesian steel business, in addition to quality improvements and cost reductions involving substantial workforce cuts, customer approval activities are also making progress. We will work to rebuild the business by further expanding sales of round steel and, in parallel, expanding sales of flat steel through synergies with the spring business.」

「In the special-steel materials business, despite progress in improving selling prices and an increase in sales at overseas subsidiary PT.JATIM TAMAN STEEL MFG., revenue declined by ¥175 million, or 1.1%, year on year to ¥15.573 billion due to lower volumes, primarily for construction equipment.」

「In the special-steel materials business, profit fell by ¥887 million, or 52.3%, year on year to ¥808 million, due to higher costs resulting from increases in raw fuel and auxiliary-material prices, among other factors, and losses at JATIM.」

「To meet demand for local procurement, we will further accelerate improvements in quality and cost competitiveness and seek to achieve an early transition to full production and stable earnings.」

「Production and sales are expected to move into full swing from 2018, with a substantial improvement in earnings expected. The steel-materials business in Indonesia is positioned as a core business of our ASEAN strategy, encompassing not only sales of steel materials but also integrated production of leaf springs, from materials through processing and manufacturing.」

「In Indonesia, following the start of sales of spring flat steel, we will begin manufacturing and selling special-steel bars to meet demand for local procurement in Southeast Asia.」

「We will establish a manufacturing and sales structure for special-steel bars, including the early launch of the rolling and finishing plant currently under construction and the opening of a branch in Jakarta, where Japanese companies are concentrated, to meet demand for local procurement in Southeast Asia.」