Daido Steel to Expand Capital Expenditure in F2010

Daido Steel increases capital expenditure in fiscal 2010 starting April to improve research & development, reorganization of production bases, new business and offshore business. The firm plans near 10 billion yen of expenditure for next innovation when the demand increases in volume obviously while the firm reduces the expenditure to around 7 billion yen in fiscal 2009, which was around half of depreciation under decreasing revenue.

The raw steel output decreased sharply since late 2008 under worldwide slow economy. The output decreased to 37,000 tonnes per month at Chita plant in January-March 2009 when the distributors tried to reduce overstock and the firm operated only one electric furnace out of 5 furnaces. The operation reached monthly 120,000 tonnes recently, which represents 80% of the capacity, due to higher demand for automobile and information technology industry. The firm expects the higher level operation will continue in January-March.

The firm tries to improve the cost structure and shorten lead time through the higher capital expenditure. The firm expends 5 billion yen for R&D and more than 3 billion yen to improve rolling mill, process plant and forging unit for better production base.

The firm starts builds solar power panel with 100 kilowatt of output capacity in Chita plant starting demonstration experiment as early as in February while the firm already shipped first panel with light focus method solar power generation to University of Miyazaki in late 2009. The firm also expands the cooperation with Titanium Company of USA for development of China and Indian market.