Yamato Steel Tries to Secure 3B Yen Full-Year Recurring Profit for F2011

Yamato Steel, Hyogo based major electric furnace steel maker, targets recurring profit at 3 billion yen and sales volume at 537,000 tonnes for fiscal 2011 ending in March 2012. The sales volume target is 15% higher than the result in fiscal 2010. Yamato Steel strengthens sales approach for large-scale projects while tries to improve the unit selling price. The firm also advances value analysis and value engineering activities against shipbuilders.

The company’s full-year sales volume increased by 1.5% to 466,000 tonnes in fiscal 2010 from fiscal 2009. The unit sales price increased by around 6,000 yen per tonne. Meanwhile, ferrous scrap average cost upped by 7,000 yen per tonne. The firm’s profit decreased year-on-year despite of cost reduction efforts.

Yamato Steel is afraid the full-year net sales would change significantly from the current forecast under unforeseeable market conditions. For instance, steel demand weakened after Japan Earthquake and the company was forced to lower the selling price in June. Meanwhile, the firm tries to keep the current recurring profit target for fiscal 2011, 2.5 billion yen for steel business unit and 0.5 billion yen for heavy industry business unit.

Yamato Steel plans to increase order acceptance for large-size H-beam related to large-scale construction projects and wide steel sheet pile, which is used for restoration and reconstruction in disaster areas of North Japan. At the same time, the company projects cost reduction in the steel business unit by 2,000 yen per tonne year-on-year by material mix and productivity improvement.

The heavy industry business unit activates VA/VE activities against large shipbuilders as well as middle- and small-class shipbuilders. The unit enhances Yamato Steel’s brand power for shipbuilding steel materials and cast steel products.

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