11-Year Financial Data by Industrial Segment(Excel 14KB)
The Steelmaking and Steel Fabrication segment implemented various measures centered primarily on enhancing the competitiveness of the domestic “mother mills” and advancing global strategies.
In Japan, NSSMC has promoted initiatives to enhance manufacturing capability by identifying the reinforcement and reestablishment of major facilities as a priority management issue. As part of these efforts, NSSMC decided to expand the coke oven facilities of the Kashima Works with the aims of increasing production capacity and enhancing cost competitiveness. In addition, NSSMC decided to revise a part of the Mid-Term Management Plan to Fiscal 2017 to optimize the iron-making production structure at the Yawata Works. (The Yawata Works comprises the Yawata, Tobata, and Kokura areas.) Initially, the Company planned to cease operation of the Kokura No. 2 blast furnace and to provide Tobata’s molten iron to the Kokura area. The new plan is to consolidate all iron-making production processes in the Tobata area, including the construction of a continuous caster (CC) in Tobata, while the No. 2 blast furnace and all other facilities in Kokura will cease operation. This will enable us to further improve productivity and enhance the overall competitiveness of the Yawata Works.
NSSMC also enhanced its global supply network to capture demand in overseas growth markets and build an operating structure that better responds to customers’ global development requirements. In fiscal 2015, NSSMC decided to produce ultra-high tensile strength steel sheet with high formability for automobiles in the United States. This will be the Company’s first attempt to produce such a type of steel overseas. In China, NSSMC constructed and commenced operation of a hot-dipped galvanizing line for steel sheet at NSSMC’s steel sheet manufacturing company for automobiles in order to meet rising demand in China for steel sheet for luxury vehicles. Moreover, a processing subsidiary for seamless steel pipe fittings in Brunei started construction of a new plant.
The Company also adopted measures during the year to fortify its competitive base in Japan and overseas. In Japan, NSSMC entered into a memorandum of understanding with Nisshin Steel Co., Ltd. (Nisshin Steel) to pursue discussions aimed at making Nisshin Steel a subsidiary with a target date of March 2017, on the condition that NSSMC will provide a continuous supply of steel slab to Nisshin Steel. By having Nisshin Steel in the group, the NSSMC Group aims to further reinforce its position as the world’s leading comprehensive steelmaker, and generate sustainable growth and increasing corporate value over the long term.
Outside Japan, NSSMC reached an agreement with its key strategic partner in the pipe and tube business, Vallourec S.A. of France, to broaden the strategic partnership primarily by deepening business alliances, and to acquire a 15% stake in Vallourec. Through this arrangement, NSSMC aims to create business structures capable of maintaining and augmenting each company’s earning power even in the severe business conditions caused by low oil prices.
NSSMC also made wholly owned subsidiaries of NIPPON STEEL & SUMIKIN TEXENG. Co., Ltd. and Suzuki Metal Industry Co., Ltd., which was renamed NIPPON STEEL & SUMIKIN SG WIRE Co., Ltd., effective October 1, 2015. Through these arrangements, the NSSMC Group will further strengthen the sharing of its business strategies with Group companies and enhance the Group’s earning power and competitiveness.
NSSMC also continued advancing measures to maximize cost improvement, including reducing raw material costs and improving yield, and sought the understanding and cooperation of its customers in adjusting steel material prices. The steelmaking and steel fabrication segment recorded net sales of ￥4,283.9 billion and ordinary profit of ¥160.0 billion.