Kobe Steel’s president Hiroshi Sato said to a reporter of Japan Metal Bulletin the firm still targets 3 trillion yen of consolidated sales, 50% of offshore sales and more than 200 billion yen of recurring profit for 2015-2020 compared with 1.859 trillion yen of sales, 35.8% of offshore sales and 89 billion yen of recurring profit in fiscal 2010 ended March 2011.
Mr. Sato said the main target is to improve the profit of the steel business. He said the firm tries to improve the profit base through across the board effort to maximize cash flow. He said the firm launches new strategy for global growth under new 3-year plan from fiscal 2013. He said the firm improves the competitiveness in high tensile steel and special steel in quality and cost while the firm invests in iron making and plate facilities at Kakogawa and Kobe works and in iron ore interest in Australian mine. Mr. Sato said the firm decided more than 20 of offshore projects in around 2 years. He said the firm will seek additional investment items to improve global earnings while the firm develops existing projects. The firm revised the recurring profit outlook downward to 25 billion yen for fiscal 2011 compared with original 50 billion yen. Mr. Sato said the lower profit is mainly due to lower profit from steel business. He said the firm revised the steel’s outlook 19 billion yen of recurring loss including profit from independent power producing business compared with former zero profit outlook for steel unit. He said the firm expects the profit would be low for fiscal 2011 but the firm tries to expand the profit toward 2020. Mr. Sato said the firm tries to improve global supply network to serve automakers. He said the firm builds continuous annealing line at US joint venture with US Steel while the firm conducts feasibility study for potential joint venture in China and India. He said the firm could reach agreement with Anshan Iron & Steel of China for the joint venture to add China to existing network of Japan, Europe and USA while the firm could need more time for Indian joint venture. Mr. Sato said the firm with global aluminium and copper supply network can access various information on weight saving effort by automakers. He said the firm tries to contribute to the automobile industry through the total solution of metal materials. Mr. Sato said the firm has more than 30 group companies in various business lines in China. He said the firm tries to double sales of the group companies from 260 billion yen in fiscal 2010. Mr. Sato said the original iron making technology, ITmk3 is succeeding around 90% operation rate at the first commercial plant in Minnesota, USA. He expects the firm conducts test to prove the performance in late 2012 after further stable operation effort. He said the firm launched detailed feasibility study with SAIL of India to utilize ITmk3 while the firm seeks major ITmk3 project in Vietnam in longer term. He expects the firm could conclude the FS with SAIL as early as in the year. He expects ITmk3 will contribute to the direct reduced iron business along with natural gas based Midrex process.