Metal One to Invest More for Emerging Countries in F2011

Metal One Corporation plans to increase investment to 10-15 billion yen in fiscal 2011 started April compared with 10 billion yen in fiscal 2010. The president Naoto Matsuoka said the firm invests in Brazil, India and Asian countries as strategic areas to follow growing steel demand. The firm eyes new building and expansion of processing bases of sheet and plate steel. The firm tries to expand the offshore business with promising demand and better profitability in the last year of current 3-year plan.

The firm tries to improve the corporate structure through the survival strategy to reduce cost and the growth strategy. The firm invested in Indian coil center for Maruti Suzuki India and Nippon Steel led Vietnamese steel pipe pile and steel pipe sheet pile making joint venture in fiscal 2010 while the firm is building new coil center in southern China, which will contribute to the sales in and after fiscal 2011.

Mr. Matsuoka said the business in fiscal 2011 depends on how large and how long impact of the major earthquake continues. The firm tries to expand the processing bases in Asia and growing offshore countries to follow growing local demand and demand from increasing transplants of Japanese manufacturers while Japanese demand will not increase at high pace even during the recovery stage.

The firm also improves the domestic business base. The firm launched Metal One Service Center Holdings in 2010 to integrate the service centers. Mr. Matsuoka said the firm tries to improve the supply balance through the consolidation and eyes alliance with other coil centers to improve the efficiency. The firm also launched Metal One Pipe & Tubular Products in April to integrate the 3 operating bases and the subsidiary, Otofuji Corporation for better distribution functions.

The firm will make next mid-term plan starting in fiscal 2012. Mr. Matsuoka said the firm tries to follow changing business condition at higher speed through next plan with different time frame and speedy actions based on new strategy. The firm launches new investment plan to follow growing offshore demand and improve the profitability from the domestic operations.

The firm plans 4.6% of consolidated gross profit on the sales in fiscal 2011 as fiscal 2010 but the firm tries to realize more than 5% of profit rate through better profitable structure. The firm tries to generate the profit equally from the domestic and offshore businesses at net profit base.