Kobe Steel to Expand High Valued Products

Kobe Steel expects the consolidated recurring profit reaches 170 billion yen for fiscal 2006 ending March 2007, which is much higher than the original outlook and near record in fiscal 2005. The president Yasuo Inubushi said the firm tries to find strategic applications and to focus the investment in the fields to improve the profitability toward 180 billion yen of recurring profit in fiscal 2008 under the 3-year plan.

Mr. Inubushi said the only one products rate is around 39% of the sales compared with 35% in fiscal 2005 and the target of 40% in fiscal 2008. He said the only one product becomes general product in some time frame and the firm should keep the hard work even to keep the higher original products rate.

The firm plans 370 billion yen of capital expenditure including 2 blast furnaces relining in the 3-year plan. Mr. Inubushi said the firm increases the environmental investment by 15 billion yen to 27 billion yen in the 3 years while the firm doesn’t have major expansion plan in the 3 years. He said the expansion of blast furnace is to stabilize the operation and reduce cost, not for output increase. He said the firm focuses on the quality despite of major consolidation in the world industry.

Mr. Inubushi said the firm considers further cooperation with US Steel to expand the supply to US transplants of Japanese automakers. He considers additional licensing of technology including cold rolled high tensile flat steel to US Steel to serve Japanese automakers depending on the market condition and talk with US Steel.

Mr. Inubushi said the firm could build another steel wire processing base in Asia to supply high valued products after the firm launches special steel wire processing plant in Guangdong and Jiangsu of China. He said the firm could expand the output capacity at wire and bar plant in Thailand to meet higher local demand for automobile.