Mr. Nobumichi Ohno, president of Mitsubishi Steel Mfg, told Japan Metal Bulletin the firm aims to raise the consolidated sales rate of the spring business to 40% in a medium term from current 29%. The consolidated sales rate was 47% for special steel products and 9% for forging products in fiscal 2010 ended in March 2011. Mr. Ohno emphasized the firm has strengthened strategic investment into the next core businesses following to special steel products, involving collaborations with overseas companies related to spring business.
Mr. Ohno referred to the technological support contract concluded with Jatim Taman Steel, Indonesian electric furnace steel maker, in July 2010 for semi-finished steel production for spring steel flat bar. He explained Mitsubishi Steel Mfg decided construction of a new ladle refining furnace and conversion of existent continuous casting equipments along the technical support scheme. He described Jatim Taman Steel is expected to start semi-finished steel production in 3Q 2012 though semi-finished steel is now supplied to Indonesian major customer from Mitsubishi Steel Mfg’s subsidiary in Hokkaido, Japan. Mitsubishi Steel Mfg can establish an integrated production of spring steel flat bar in Indonesia. Mr. Ohno gave a current view that Mitsubishi Steel Mfg is on line to gain 9 billion yen of annual recurring profit in fiscal 2011 ending in March 2012 though there are indirect demand impacts by flood in Thailand, construction machine shipment is slowing down in China due to the government’s tight monetary policy, and the market downturn is concerned along financial crisis in Europe. The firm recently established or expanded spring factories for construction machines and automobiles in China. Mr. Ohno said the firm is constructing a new plant to manufacture large coil sprig adopted to construction machines to meet the demand from local sites of Japanese construction machine makers. The operation is expected to start in 2Q 2012. As for automotive coil spring, he explained the firm completed capex into the existent Chinese plant and doubled the output capacity to 500,000 pieces per month. The firm aims to increase order receipts not only from Japanese automakers but from European and Chinese users. Mitsubishi Steel Mfg has also enhanced overseas operations in India, Thailand and North America. The firm reached a basic agreement with Stamp Shure & Sofmap Springs (SSSS), Indian spring maker, to establish two productive joint companies in India in 3Q 2011. The JV plants will produce automotive coil spring, automotive stabilizer and large coil spring for construction machines. Mr. Ohno explained Mitsubishi Steel Mfg and SSSS are now carrying out due diligence on the businesses. The steps are smooth, he said. In Thailand, component production is busy at the subsidiary, MSM Thailand, for turbochargers applied to European cars. In North America, one subsidiary, MSSC Canada is gaining profit while the other subsidiary, MSSC US is posting loss. Mr. Ohno showed an intention to improve profitability of MSSC US and prepare for the next business step in North American car market.