Nakayama Steel Woks to Close Plate Mill

Nakayama Steel Works announced on Monday the firm closes plate mill in the first half of fiscal 2012 started April. The firm consigns the plate production to Nippon Steel. Nakayama Steel Works continues sales of plate mill products while the firm continues production of cut hot rolled flat steel from the hot strip mill. The firm reduces the manpower by around 200 to around 520 level. The firm tries to improve the profitability through additional plan for future.

The firm already stopped operation of converter and coke oven in 2010 under restructure plan launched in 2009. The firm reduced the manpower by around 20% to around 700. The firm conducted various efforts for better profitability in steel sourcing, utilization of electric furnace steel, sales expansion for higher grade products and cost reduction.

The firm posted consolidated recurring loss in fiscal 2009 due to shrinking domestic demand after Lehman shock. The firm posted recurring loss for 3 years in a row through fiscal 2011. The interest bearing debt increased by 7.3 billion yen to 102.4 billion yen at end of fiscal 2011 from fiscal 2010.

Domestic plate demand is slow for manufacturers while the demand increases for rebuilding activity for the major earthquake damaged area. The firm expects lower domestic demand when domestic shipbuilders will reduce the consumption. The firm decided the closure of plate mill under oversupply situation in Asian countries.

The firm started operation of plate mill with around 240,000 tonnes of annual output capacity in 1956. The firm has supplied plate with 9-50 millimeters thick, 914-2,100 mm width and 13 meters length. The production increased by 41,000 tonnes to 185,000 tonnes of plate mill products in fiscal 2011 from fiscal 2010 while the firm reduced hot coil cut plate output by 9,000 tonnes to 20,000 tonnes.