Daido Steel Targets Securing Profit at 70% Utilization

Daido Steel tries to improve the profitability enough to making money even at 70% level of operation rate. The firm establishes creative business model by value adding activity through cooperation with the users while the firm revises the products portfolio. The firm also expands the offshore business mainly in growing China and India targeting 200 billion of offshore sales in 2015 compared with estimated 70.1 billion yen of offshore sales in the year to March 2009.

The firm shifts the resources into businesses other than steel products and the non-steel business represents 50% of the sales and profit. However, the firm posted 17.1 billion yen of recurring loss with 255.4 billion yen of sales in April-December, 2009 which was 43.7% lower than same period of 2008. The firm expects to secure profit in January-March 2010 due to better demand for automobile along with the cost cutting effort.

The firm expects the business condition in fiscal 2010 starting April is in line with profitable condition in January-March. However, the firm decided to improve the earning power to secure profit at 70% level operation. The firm started to study for potential integration of production facilities. The firm also develops new value added special steel products including rare metal less tool steel and other resource saving products.

The firm launched offshore business unit in March 2009 to develop offshore business. The firm eyes potential production base in emerging countries by utilizing alliance with Timken of USA. The firm also eyes worldwide business network for non-steel products business including special magnet and solar power system.