JFE Steel to Accelerate Asian Business Expansion

JFE Steel focuses the resources on Asian business to build Asia based global network eyeing integrated steel plant in Southeast Asia. The firm improves the position as world top class of global steel supplier. The firm could decide investment in integrated steel project by the partner of JSW Steel of India in as early as first half of 2012 to launch operation in and after 2015.

The firm expects Asian market will grow stably as steel supply base with high growth of China, Southeast Asia and India and strategic access for growing regions including Middle and Near East and Africa. The firm Japanese steel demand couldn’t recover the peak level due to shrinking domestic manufacturers under higher yen rate, decreasing population and the earthquake damage.

The firm established vertical integration network with Asian partners in South Korea, China, Thailand and India by providing semi-finished steel to the partners while the firm exports high valued steel products including automotive flat steel and tinplate. However, rivals in South Korea and China improve the competitiveness partly due to higher yen rate.

The president Eiji Hayashida said the firm has no growth chance without accelerated Asian business expansion. The firm expands the offshore business into upstream of steel operations to establish offshore integrated production base.

The firm already has partnership with JSW Steel to supply JFE Steel’s material steel based cold rolled flat steel from Vijayanagar works of JSW Steel to Indian transplants of Japanese automakers. The transplants are under check process for the sheet steel. JFE Steel studies potential investment in integrated steel project in West Bengal, which JSW Steel would start the construction as early as in 2012.

Mr. Hayashida said Southeast Asia is growing market separated by India. The firm studies potential integrated steel project in Vietnam, Thailand and Philippines.

JFE Steel plans 700 billion yen of investment in the third mid-term plan. The firm would keep the same level of investment in the fourth mid-term plan. The firm focuses on the resources on the Asian business. The firm decided not to invest in Dongkuk Steel’s Brazilian steel project while JFE Steel keeps improving the supply network through alliances with ThyssenKrupp of Germany and AK Steel of USA.