Kobe Steel to Seek Growth in Global Market in Next 3-Year Plan

Kobe Steel shifts the effort to growth more for 3-year plan starting fiscal 2009 after the firm improves the financial position in 3-year plan to fiscal 2008 ending March 2009. President Yasuo Inubushi said next 3-year plan is to seek growth aggressively by utilizing the technology and high valued products line to meet growing demand worldwide. Mr. Inubushi said the firm improves the financial position while the firm invests to clear bottleneck process and to renew old facilities for better production base. He said the investment already reaches around 290 billion yen in fiscal 2006 and 2007 compared with 350 billion yen for 3-year plan through fiscal 2008. The firm tries to expand offshore operations including expansion for aluminium forging facility in USA, European and Chinese welding materials, Chinese construction machinery and Chinese special steel bar and wire rod processing. Mr. Inubishi said the firm also studies with US Steel for potential expansion of continuous galvanizing line at the joint venture, PRO-TEC Coating. He said the firm tries to launch the first commercial plant of the new iron making process, ITmk3 through joint venture with Steel Dynamics of USA while the firm is in study for second project with Cleveland-Cliffs of USA. Mr. Inubushi said the firm should cover annual 15 billion yen higher depreciation due to the new system in order to achieve more than 180 billion yen of recurring profit target for fiscal 2008 compared with estimated 150 billion yen for fiscal 2007. He said the firm tries to reduce the cost and passes higher cost for raw materials on the selling price. The firm also improves the products mix with higher valued products.