Kobe Steel to Seek Standalone Growth, Mr. Sato

Kobe Steel’s president Hiroshi Sato said to reporters on Thursday the firm has no intention to join consolidation of Nippon Steel and Sumitomo Metal Industries. He denied possibility to spin off the steel unit for the merger participation.

Mr. Sato said Kobe Steel completed business optimization in 2005 and the firm tries to create synergy through combination of the different business units. He emphasized every business is vital to the firm even if each business is small. The firm tries to increase its presence in growing market and to improve the group’s growth power by removing sectionalism between the units under medium- to long-term business vision. He said the firm intends to announce new 2-year plan starting April 2011 in April or May.

The steel unit represents 45% of Kobe Steel’s sales while machinery and construction machinery units will post higher recurring profit totally than the steel unit. The diversified earning power is based on the diversification structure of the firm.

The firm utilized knowledge of its units and group companies to develop new technology. The firm was awarded from Toyota Motor for the forming technology development of 980 MPa strength steel into automobile pillar at one time, which resulted in 25% lower cost and 35% lower weight.