JFE Holdings announced on Friday the firm targets 10% of consolidated recurring profit rate on 4 trillion yen of sales for fiscal 2014 ending March 2015 under new 3-year plan. The firm plans 1 trillion yen of investment for steel business, mainly for JFE Steel compared with 800 billion yen in 3-years through fiscal 2011. The firm earmarks the half of the investment for offshore business. JFE Steel eyes 40-50 million tonnes of volume compared with around 30 million tonnes now by following growing demand in emerging countries. The firm tries to increase the presence as world leading steel supplier.
JFE Holdings tries to improve profitability of JFE Steel under the new 3-year plan for sustainable growth. JFE Steel expands the profit base to middle grade with growing demand in emerging countries along with high grade steel products. The firm expands cooperation with JSW Steel and JFE Shoji Trade while JFE Steel tries to build new integrated steel plant in Vietnam and India. The firm expands the steel sales volume to around 40 million tonnes in 5 years from current 30 million tonnes level eyeing 50 million tonnes in future. The firm improves the cost performance in upstream operation along with better cooperation with JFE Shoji Trade and better domestic supply network. The firm tries to shift the business model from current export oriented sales to combined growth in export and offshore production. The firm targets 30% of own raw materials sourcing compared with current 20%. The firm plans around 160 billion yen of capital expenditure based on 190 billion yen of depreciation in fiscal 2012 compared with 180 billion yen of expenditure on 230 billion yen of depreciation in fiscal 2011. The firm shifts the weight to investment in emerging countries. JFE Engineering targets more than 10% of offshore order in fiscal 2014 compared with 5% in fiscal 2011 while the firm expands the order for new products from 2% to 8%. Universal Shipbuilding tries to generate synergy from merger with IHI Marine United to compete with major rivals in South Korea. JFE Holdings tries to keep 0.5-0.8 of debt equity ratio for A-grade ratings by international credit rating agencies. The firm keeps 25% of dividend payout rate.
