Marubeni-Itochu Steel Targets 2% World Steel Trading Share

Marubeni-Itochu Steel announced on Friday the firm targets 2% of world trading share in fiscal 2008 ending March 2009 under the second 3-year plan. The president Tsunekatsu Yonezawa said the firm focuses on qualitative and strategic targets instead of numeric targets. The firm invests 50-100 billion yen of resources excluding existing expansion into strategic areas including North American and Chinese markets and automobile and energy industries to expand the business. The firm expands the world trading volume to 22 million tonnes in fiscal 2008, which represents 2% for 1.1 billion tonnes of world steel consumption, from 16 million tonnes in fiscal 2005, which was 1.6% of 1 billion tonnes of steel demand. The firm also expands the consolidated sales to 2 trillion yen from 1.698 trillion yen during the period. The firm allocates the 70% of resources into offshore operations with the balance for domestic business. The firm also renews and expands the existing operations while the firm improves the area strategy and business functions in strategic areas. The firm also eyes merger and acquisition for expanding, investment in markets with potential growth and business alliances. The firm targets 55 billion yen of consolidated operating profit for fiscal 2008 from 47.1 billion yen in fiscal 2005. The firm tries to secure 50 billion yen of recurring profit and more than 30 billion yen of net profit for fiscal 2008. Mr. Yonezawa said the actual net profit was around 27 billion yen excluding special items in fiscal 2005 though the firm posted 31.9 billion yen of net profit in fiscal 2005. The firm tries to improve the profitability enough to post 30 billion yen of net profit stably. The firm also tries to improve 4% of return on assets in fiscal 2008 when the firm estimates the actual ROA was less than 4% compared with reported 4.7% in fiscal 2005. The firm expands the total assets to around 800 billion yen in fiscal 2008 from 696.7 billion yen in fiscal 2005.