|Fiscal 2017 business results and fiscal 2018 outlook|
In fiscal 2017, the Steelmaking and Steel Fabrication segment recorded an increase in sales and profit from the previous year at ¥5,017.2 billion in net sales (compared to ¥4,052.2 billion in fiscal 2016) and ¥245.7 billion in ordinary profit (compared to ¥138.0 billion).
Stricter environmental regulations and shifting in source of power for automobiles will not change automakers’ efforts to decrease the weight of the vehicles they make; these efforts are expected to remain intact or even increase. Nippon Steel will therefore accelerate development of industry-leading steel materials where we have competitive advantages, as represented by ultra-high-tensile steel sheets that contribute to lighter vehicles. At the same time, we will continue R&D so as to respond to customer needs for lighter vehicles and multi-materials, eyeing the possibility to ally other materials with steel by utilizing knowledge of the steelmaking technologies. In fiscal 2018, the Automotive Material Planning Department was established, to engage in new initiatives in automotive materials.
|Energy and resources||
Nippon Steel believes it is important to maintain and expand its world-leading technology level in steel materials for the energy market and firmly establish ourselves as a market leader, in order to realize a stable profit structure regardless of the market environment.
|Infrastructure||Construction and civil engineering||Mainly in emerging countries, in cooperation with local major universities and other academic institutions, Nippon Steel is engaged in dissemination of its advanced steel structure technology.|
|Railways||Having completed capital investments in our North American manufacturing base for railway wheels and axles, Nippon Steel now has a manufacturing system with bases in Japan and the United States. By using such facilities, we aim at raising our market share in the global market, including Asia and Europe.|
Nippon Steel contributes to enhancing the safety of structures and the development of society by delivering high-performance steel plates for large industrial / social structures such as ships, bridges, and high-rise buildings; marine structures for oil and gas extraction; and high-performance steel plates used for tanks and other energy-related products.
Nippon Steel supports various industries and people's lives by delivering sheet steel used to make automobiles, electrical appliances, housing, beverage cans, transformers, and other goods. Having production and processing bases worldwide, this unit provides high-quality, high-performance products and services in Japan and overseas.
Nippon Steel delivers high-quality, high-performance bars and rods to a wide range of industries including the automotive, construction, and industrial machinery industries. In the automotive business, this unit focuses on high-end products used in important automotive components such as engines, drive trains, and suspensions.
Nippon Steel delivers H-beams, steel sheet piles, steel pipe piles, rails, and other steel materials used in the civil engineering and construction sectors in Japan and overseas. By responding to diverse needs, this unit contributes to the development of infrastructure that supports people's lives.
Nippon Steel is a world leader in high-end seamless pipes used in oil and gas development and other energy areas. Large-diameter tubes for pipelines and steel tubes for automobiles and construction / industrial machinery are also areas of strength.
Nippon Steel is the only manufacturer of railway steel wheels and axles in Japan. Our major products in this unit are railway rolling stock components and forged crankshafts for automobiles. Global expansion is also progressing and there are two manufacturing bases for railway wheels and axles, and four bases for crankshafts in overseas locations.
Utilizing titanium's lighter, high-strength, and corrosion-resistant properties, Nippon Steel is a world leader in titanium products for construction, aviation, general industrial, and consumer-related applications.
Nippon Steel Stainless Steel Corporation provides steel users with a wide range of high-quality stainless steel products that includes steel plates, sheets, bars, and wire rods by leveraging its most advanced technologies in the world. This subsidiary has developed the world's first Sn-added low-interstitial ferritic steel grades, named the "FW(forward) series," and a new type of duplex stainless steel.
Engineering & Construction/Chemicals/New Materials/System Solutions
The Engineering & Construction segment saw signs of an improvement in the robust business environment, as oil prices rose and overseas steelmakers resumed capital investments.
Solid business conditions in the domestic construction sector and other areas and the Company’s steady control of project execution also contributed to an increase in both sales and profit. The segment posted net sales of ¥294.2 billion and ordinary profit of ¥9.1 billion.
|Strategy||Nippon Steel Engineering plans to expand its value chain including plant operation and maintenance, centering around the EPC* business, by enhancing the capacity to provide optimal "EPC Solutions" that are appropriate to customers’ requirements. The Company is also strengthening its local organizations in the overseas growth areas and developing business that matches local needs. Furthermore, responding to changes in the external environment, the Company intends to flexibly cooperate with outside parties or internal sources, such as technology and knowhow of each business field, including a comprehensive collaboration with Toyo Engineering Corporation, and to become a more resilient and flexible complex entity, with the aim of achieving stability and growth in profit.|
|Business field||Provision of engineering solutions in steel plants, environmental and energy, marine, building construction and steel structures, pipelines, and new business fields.|
* EPC: building and construction services that include Engineering, Procurement, and Construction
The Chemicals segment expanded sales of circuit board materials and display materials for electronic devices such as smartphones in its functional materials business, and posted record-high sales volume of both materials during the term. In the chemicals business, supply and demand conditions for styrene monomer, a core product in this segment, were favorable, enabling the Company to report a steady gain in profit. In the coal tar chemicals business, supply and demand conditions for needle coke were tight due to robust demand for graphite electrodes used in the electric furnace sector, while demand for coke used in negative pole electrodes in lithium ion batteries also increased. As a result, the market environment showed a significant improvement along with rising product price levels and other factors. The chemicals segment recorded net sales of ¥200.7 billion and ordinary profit of ¥15.4 billion.
|Strategy||Nippon Steel Chemical & Material is implementing the 2020 Mid-Term Management Plan, aiming at using features of its four main business sectors and establishing a profit structure that ensures sustainable, stable ordinary profit of ¥10.0 billion or more (ROS of 5% or higher). Under a slogan “Promote base foundation (in terms of facilities, personnel, and work) in anticipation of growth, and implement a down-to-earth growth plan,” the Company intends to steadily grow earnings power of its existing business by founding the base that supports sustainable growth, and also to build an earnings base by investing management resources in new business areas with growth potential, where the Company’s core technological strength can be utilized, such as functional materials and automobile-related.|
|Business field||Engaged in a wide range of business lines, including carbon materials, functional materials, resin materials, and other chemicals, by combining coal chemicals and petrochemical by-products of the steelmaking processes.|
The New Materials segment continued to post favorable sales of metal foils for suspension and other materials within its semiconductor and electronics industrial materials business. In the field of environmental and energy materials, sales of metal substrates expanded as the Company steadily captured demand in developing countries. Although overall performance was affected by severer competition, an increase in sales boosted both net sales and profit.
The new materials segment posted net sales of ¥37.0 billion and ordinary profit of ¥1.9 billion.
|Strategy||Consistent with the motto "Innovate the world with advanced materials," Nippon Steel Chemical & Material aims to become a world-leading company in each business area by acquiring distinctive technologies and achieving international cost competitiveness. The three targets of strategy are as follows. To contribute to the creation of value for customers: By emphasizing matching solutions to customers' true needs, the Company will contribute to value creation for our customers. To promote global business development: Our production and sales bases in Japan and seven other countries will cooperate to meet increasing global demand, and thereby enhance the level of service for global customers. Domestic bases will fulfill the role of mother plant: the Company will promote the development of original new products, thoroughly pursue higher productivity and cost reduction at our domestic bases, and expand similar efforts at our overseas bases.|
|Business field||Provision of various material solutions to global customers by using such diverse advanced materials as metals, inorganic materials, and carbon fiber.|
The System Solutions segment provides comprehensive solutions in the planning, configuration, operation, and maintenance of IT systems for clients in a wide range of business fields and develops leading-edge solutions services that respond to the changing business conditions of its clients. During the fiscal year, the Company promoted the development of solutions for its customer enterprises to enable them to make use of AI, machine learning, and IoT and thereby enhance the sophistication of their operations in their production and logistics workplaces. This contributed to the expansion of both sales and profit. The system solutions segment recorded net sales of ¥244.2 billion and ordinary profit of ¥23.2 billion.
|Strategy||In keeping with the advent of widespread use of digital innovations in IT for business, NS Solutions is further strengthening its conventional System Integration (SI) business model, which we now call "NSSOL1.0," and is developing new ones, NSSOL2.0 and NSSOL4.0. NSSOL2.0 is for building long and deep partnerships with clients, mainly in cloud services and IT outsourcing services, jointly developing new markets, working on the real issues of clients, and ultimately helping them grow their business.
NSSOL4.0 aims at exploring new business fields arising from digital innovation, such as IoX™* solutions and use of AI.
|Business field||Provision of IT business solutions to a wide range of sectors by applying the extensive insight and advanced, practical IT capabilities acquired in the steel manufacturing business.|
* IoX™: NS Solutions' trademark, meaning a concept to integrate Internet of Things (IoT) and Internet of Humans (IoH)