Nippon Steel to Seek Growth in New Steel Age, Mr. Mimura

Nippon Steel’s chairman Akio Mimura said on Friday new steel age comes after worldwide economy slump in recent years. He said at speech in Bari-Ship Imabari Maritime Fair in Ehime Nippon Steel should improve international competitiveness through domestic consolidation including merge with Sumitomo Metal Industries for the goal of global player with more global business activity to cover offshore steel demand.

Mr. Mimura said integrated company of Nippon Steel and Sumitomo Metals would expand the raw steel output volume more than former Nippon Steel’s target of annual 50-60 million tonnes. He said the integrated company tries to keep the domestic capacity and expands the offshore capacity. He emphasized the integrated company will seek various joint business opportunity with offshore major steel makers.

Mr. Mimura said Nippon Steel streamlined the operations through major restructuring since Plaza accord in 1985. He said the firm also expanded the soft alliance network with Sumitomo Metals, Kobe Steel and POSCO to improve Nippon Steel’s management quality after Mittal Steel’s acquisition of Arcelor in 2006.

Mr. Mimura said steel industry faces new steel age when world economy gears up from stable annual 3% growth to 4-5% growth after Lehman shock. He said Nippon Steel should change the policy from former soft alliance to hard alliance for further international competitiveness. He said global steel player should certain size of production volume with stable financial base and rich human resources to follow growing global demand especially in emerging countries.

Mr. Mimura said the solution for Nippon Steel is the merger with Sumitomo Metals. He said the merger should result in massive synergy including products mix synergy and cost down to compete in international competition and to expand offshore business aggressively.