JFE Steel to Seek High Value, Low Cost, Better Human Resources

JFE Steel’s president Hajime Bada said the firm seeks both better cost competitiveness and higher value items. He said the firm addresses development of new products and technology and development of human resources more than before. The firm tries to distinguish itself in the global market through the better technology and human ability through the group.

Mr. Bada said the firm already finished study to expand the annual raw steel output capacity to 33 million tonnes for the company and 37 million tonnes in the group. He said the firm tries to find the timing to implement the growth strategy depending on the market condition while the firm keeps studying various options for growth including vertical specialization tie-up with offshore partners and offshore operating forces.

JFE Steel’s raw steel output is near 90% of the peak. Mr. Bada said the firm operates the downstream operations including cold rolling mill and coating line at near full capacity and operates high valued steel items including electrical steel and high tensile steel while the operation is still under capacity for hot strip mill, plate mill and pipe making line. He said the firm is still waiting the timing to restart idling 2 blast furnaces.

Mr. Bada said the alliance with JSW Steel of India is to secure supply base for automobile in Indian market by providing production technology. He said JFE Steel can growth along with JSW Steel’s growth strategy and can utilize JSW Steel’s supply network in India. He said they try to seek cooperation opportunities in raw materials procurement, energy saving, environmental measurement, participation in JSW Steel’s new steel projects and cross shareholding along with automobile area.

Mr. Bada said world steel market is obviously overcapacity. He said World Steel Association expects world steel consumption increases by 9% in 2010 from 2009 but the demand is lower than the peak in 2007. Asian steel makers should adjust the production level to local demand to avoid loss making price competition as early 2000.