Japanese steel merger (2/4)

A new global steel giant was formed on April 1st as JFE Steel Corp., incorporating NKK Corp., Japan’s No. 2 steelmaker, with Kawasaki Steel Corp., the No. 3 steelmaker. The combined metric tonnage of the two companies in the last fiscal year (ended 31 March 2003) was estimated to be about 26 million. Heading up the new enterprise, which is a subsidiary of JFE Holdings Inc., is Fumio Sudo, President and CEO, and former President and CEO of Kawasaki Steel Corp. Chairman of the new group is Masayuki Hammyo, former President and CEO of NKK Corp. Annual steel sales are expected to be about Y 2060 billion in fiscal year ending March 2006. The company will operate two main steel mills, the East Japan Works, which combines Keihin Works and Chiba Works, and the West Japan Works, which combines Fukuyama Works and Kurashiki Works. A fifth plant, the Chita Works, will continue to specialise in the production of pipe and tube. Current employment, 40,800, is slated to be reduced, primarily through attrition, to 36,800 in three years. JFE Steel Corp. is closing a number of production facilities to maximize capacity utilisation. One blast furnace has already been closed and a second is scheduled to be shut down next year. Fifteen finishing facilities have or will be closed. The steelmaker will enhance the operating ratios of the remaining facilities.

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