METI to Encourage Consolidation in Steel Makers, Industry

Ministry of Economy, Trade and Industry encourages consolidation of private companies to improve the industrial competitiveness. The director general, economic and industrial policy bureau Kenyu Adachi said METI tries to improve the international competitiveness by utilizing Law on Special Measures for Industrial Revitalization and other legal system. METI already asked Japan Fair Trade Commission to consider international competition for the screening of the business combination. Japanese steel makers’ competitiveness gets lower than rivals in South Korea and China when the rivals get larger and efficient while yen rate increased significantly against US dollar recently. The METI’s consolidation policy could result in further reshuffle in electric furnace carbon steel makers and stainless makers.

Japanese steel makers eye potential consolidation. However, Japan Fair Trade Commission failed to approve proposed merger by Kyoei Steel and Tokyo Tekko in 2009. Nippon Steel and Nisshin Steel couldn’t consolidate the stainless units due to the commission’s policy before. The commission is one of hurdles for the steel makers’ consolidation.

Mr. Adachi said METI tries to improve the guideline of the commission and to encourage the consolidation by other ideals including facility closure through limited liability partnership system. METI also supports finance for the consolidation.

METI tries to secure budget to encourage private sector’s consolidation, offshore business and acquisition. METI also tries to reduce corporate tax and better tax incentive to encourage consolidation. METI tries to improve the international competitiveness for Japanese companies for future growth for Japanese economy.