Nisshin Steel to Focus on Actions for Better Profit

Nisshin Steel’s president Hideo Suzuki said the firm tries to focus on cost cut and immediate actions for better profitability in fiscal 2009. He said the firm also improves the competitiveness by improving management system from order receipt to shipping, production platform and new products development ability. He said the firm also studies for next growth strategy through global business plan associated with the alliance with Acerinox of Spain.

Mr. Suzuki said the firm postponed the new mid-term business plan, which is supposed to be launched in April 2009, under uncertain business condition. He said the situation is hard to understand with existing knowledge and steel companies should change the view point to deal with the new situation flexibly.

Mr. Suzuki expects the steel demand for manufacturers hit bottom by March and recovers in and after April while the construction application is still uncertain when the housing starts could decrease to around 800,000 units in fiscal 2009.

Mr. Suzuki said the firm reduces the raw steel output by 40% including 60% production cut for stainless steel. He said the firm builds slab inventory on newly leased land near Kure works when the carbon steel production cut for upper stream operation is smaller than downstream. However, he said the firm tries to keep operation for 2 blast furnaces by reducing the operation rate to as low as around 1.4 times of production for the inner volume.

Mr. Suzuki said the firm tries to seek opportunity for expansion in stainless business when world major stainless makers have annual 3 million tonnes of production capacity. The firm tries to better solutions including global expansion and domestic consolidation for better presence in the industry. New Malaysian cold rolling mill joint venture with Acerinox is the part of the strategy.

Mr. Suzuki expects stimulus package could create new demand for coated steel products in communication and energy industry. He said the firm tries to develop new products to meet new demand at home and abroad while the firm expands the application for existing products including zinc-aluminium-magnesium coated steel, ZAM.