Chubu Steel Plate to Improve Profitability in New 3-Year Plan

Chubu Steel Plate, Nagoya based steel plate maker, aims target to strengthen its profitability with sales expansion of differential and nonprice competitive products and to keep its ROS (Return on Sales) at above 20% during the 3-year management plan to fiscal 2008 ending March 2009. The firm estimates 48.6 billion yen of non-consolidated sales and more than 10 billion yen of recurring profit in fiscal 2008, though the sales maintains flat and the profit decreases by around 30% from fiscal 2005. The firm aims to improve the sales ratio of differential products and the supply reliability for its customers.Chubu Steel Plate plans to balance each sales ratio to around one third for commodity goods, high value added products and Chubu Steel Plate’s original products. The firm will increase the sales of high-valued products, including special grade plate, to 32% from current 27%. The sales ratio of original products, such as steel plate specialized for laser cutting, is expected to become to 34%. In commodity fields the firm will increase the output of steel plate with more than 60 millimeters of thickness to 3,300 tonnes per month from current 2,500 tonnes, the output ratio of which would increase to 22% from present 17% in total commodity plates.Chubu Steel Plate aims to reduce total costs by 3% during the 3-year plan when the firm expects ferrous scrap purchase price might rise by 20% in 3 years from fiscal 2005 and energy and other material costs also seem to increase due to high crude oil price. The firm also plans to invest about 10 billion yen for equipment expansion to increase the production scale elasticity by 5%. Actual investment project is now under consideration.