Nippon Steel to Expand Investment for Profit Growth

Nippon Steel plans to expand the consolidated investment to 1.25-1.3 trillion yen for 3-year through fiscal 2008 ending March 2009, which is 400-450 billion yen higher than original plan and 2 times of the value for 3-year through fiscal 2005. The firm expands the capital expenditure at home and abroad to increase the high valued steel output. The firm is gaining from those investments including stronger alliance network and raw materials securing under the profit growth strategy. The firm planned around 850 billion yen of investment for current 3-year plan to improve the technical advantage and the group’ competitiveness for sustainable profit growth. However, the firm revised the plan to expand the investment for volume growth to annual 40 million tonnes or more of output to meet higher demand growth. The firm expands the parent company’s raw steel output to annual 35 million tonnes level after blast furnace relining at Oita works in 2009. The firm eyes 40 million tonnes of output including cooperation with alliance partners. The firm tries to meet higher demand from domestic manufactures including automakers through the expansion. The capital expenditure increases to 340 billion yen for fiscal 2008 compared with 309 billion yen in fiscal 2007 and 273.4 billion yen in fiscal 2006. The expenditure in the 3-year is around 920 billion yen, which is 220 billion yen higher than original plan and higher than 548.8 billion yen in 3-year to fiscal 2005. The firm also invested in alliance partners including POSCO and Sumitomo Metal Industries. The firm expands output capacity at the offshore galvanizing joint ventures while the firm expands the investment in joint ventures for iron ore and coal mines. The firm studies additional investment mainly for offshore business. The investment could reach as much as 380 billion yen in 3-year to fiscal 2008, which is higher than 150 billion yen in original plan and 86.2 billion yen in 3-year to fiscal 2005.