Sumitomo Metals to Double Capital Expenditure in F2006

Sumitomo Metal Industries announced on Wednesday the firm increases the capital expenditure to 1.9 times at 125 billion yen including Sumikin Iron & Steel and other 2 major steel subsidiaries in construction base for fiscal 2006 started April from fiscal 2005. The expenditure reaches 100 billion yen for the first time since fiscal 1996. The firm tries to shift to high valued products and to improve competitiveness through the major investment including relining blast furnace and new hot-dip galvanizing line at Kashima works and major renewal of upstream operations at Wakayama works. The parent firm increases the expenditure to 1.7 times at 86 billion yen in fiscal 2006 from fiscal 2005. The firm expends 18 billion yen for the 29 billion yen relining of no.3 blast furnace at Kashima, 15 billion yen for 26 billion yen new hot-dip galvanizing line and 9 billion yen for 57 billion yen independent power producing plant. The firm also expends 6 billion yen for 40 billion yen renewal of seamless mill at Wakayama to make higher value products. The major 3 steel subsidiaries expend 39 billion yen in fiscal 2006, which is 2.6 times of fiscal 2005. Sumikin Iron & Steel increases the expenditure from 5.5 billion yen to 29 billion yen. Sumitomo Metals (Kokura)’s expenditure is flat at 9 billion yen and Sumitomo Metals (Naoetsu) increases the expenditure from 600 million yen to 1 billion yen.