Daido Steel Retries Current Peak Sales and Profits during F2012-2014

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Mr. Tadashi Shimao, president of Daido Steel, told Japan Metal Bulletin the firm aims to recover the current peak financial accounts, consolidated net sales at 590 billion yen in fiscal 2007 (April 2007-March 2008) and consolidated recurring profit at 39.4 billion yen, during the next medium term for fiscal 2012-2014. He told the firm tries to raise cost competitiveness as well as sales ratio of high value added special steel products more. He explained the firm appeals its unique material technologies while enhances plus services such as processing of special steel products in order to gain global market shares.

Mr. Shimao expressed he feels like the firm edges upward on a sensitive balance among unstable and unforeseeable factors such as extremely high yen rate and energy shortage problem. As for electricity shortage concern in Japan, he suggested Daido Steel’s main plant is located in Nagoya area while power shortage might occur this summer, in 2Q-3Q 2012, along local automakers’ high operations.

Mr. Shimao explained about conversions inside Chita iron works, Aichi, Japan with 20 billion yen capex. Daido Steel regards Chita iron works as the mass production base and sets up one mass production line for structural steels, he said. Meanwhile, the works maintains production capacity for bearing steels, heat-resistant steels and ferrite series stainless steels by no.2 unique continuous casting line. He told the works improves cost competitive power by increasing heat efficiency and the conversions will complete in 3Q 2012. The firm also increases heat treating and mechanical processing capacities for special steel products at Shibukawa works, Gunma, Japan.

Mr. Shimao also referred to the current decision to integrate three group dealers for tool steels, Daido Amistar, Daido Matex and Ishihara Kotetsu. He explained domestic tool steel market has shrunk by 20-30% since Lehman’s fall and the users have reduced consumption volume of metal molds. He said the integrated company can represent higher competitiveness while become the base to grow human resources for overseas businesses.

He told about Daido Special Steel Shanghai, a local company of Daido Steel in China,which was opened a year ago. He explained Daido Special Steel Shanghai is now trying to increase local material procurement while eyeing the demand growth for STC furnace along with car production increase in the country. As for another overseas business in India, he said Daido Steel finished supportive consultation for capacity expansion at Sunflag, Indian special steel maker and Daido Steel’s partner. They seek new and additional collaborations with Sunflag for future.

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