Kobe Steel Makes Full Effort for Cost Reduction

Kobe Steel held general meeting of shareholders on Wednesday. The attendees were 709 shareholders compared with 716 in 2011. The meeting took 1 hour 53 minutes compared with 2 hours in 2011. The company failed to pay year-end dividend for fiscal 2011 ended March 2012. The president Hiroshi Sato said the firm tries to continue better dividend stably. Mr. Sato said the company tries to improve the profitability through across the board effort for cost reduction while the executives accept lower executive compensation.

Kobe Steel reduced the executive compensation in July 2011, which was the first attempt since period after Lehman shock. The firm reduces the compensation in April 2012 and July. The compensation is averaged 19% lower than June 2011 level.

Mr. Sato indicated Kobe Steel will continue cooperation with Nippon Steel & Sumitomo Metal as a part of the alliance when the makers can find mutual benefit. He said Kobe Steel has diversified businesses while steel business represents only 48% of total businesses. He emphasized the business structure is different from Nippon Steel and Sumitomo Metal Industries.

Kobe Steel explained the firm supplies all of electric power generated from independent power producing for Kansai Electric Power. Kobe Steel sells a part of power from power generators in Kakogawa works and Kobe works. The firm has no expansion plan for independent power producing due to limited space.

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