Kobe Steel Accelerates Machinery Business Expansion at Overseas

Kobe Steel’s machinery division accelerates overseas operations to achieve profit target under Kobe Steel Group’s mid-long-term management vision, named KOBELCO VISION “G.” The division examines operative network expansion in emerging countries such as Brazil and India while plans M&A at total 30 billion yen until fiscal 2015 ending in March 2016. Mr. Kazuo Shigekawa, vice president of Kobe Steel, said the division utilizes positive effects of high yen rate trend.

The division has expanded global business in recent years. For high grade compressor business, the division currently implemented investment in a compressor maker in Wuxi, China, productive capacity expansion at KCA in the U.S.A., and establishment of Dubai office.

For normal grade compressors, the division raised productive capacity at a joint company in Shanghai while KMA, Singaporean subsidiary, established a local company in Vietnam. The division also established a production and sales company for gum processing in India in cooperation with Larsen & Toubro, Indian engineering company.

Kobe Steel examines establishment of a compressor sales company in Brazil and a production and sales company of gum and tire related facilities in China. The division plans to raise overseas production rate to 35% from present 25% for compressors and to 25% from current 15% for industrial machineries. The division also plans to raise local procurement ratio to maximum 40% from present 25%.

The division’s consolidated financial target for fiscal 2015 is 220 billion yen of net sales, more than 20 billion yen of recurring profit and 10% of Return on Sales.