Jun. 05, 2020

Nippon Steel Corporation

Nippon Steel Corporation has decided to reline the No. 3 blast furnace of its Nagoya Works.

In light of a decline in domestic steel demand, intensified competition in the overseas market, and need of large-scale investment for renewal of the Company’s steelmaking facilities over the medium- to long-term, we decided on February 7, 2020 to implement new production facility structural measures according to our basic policy to establish an optimal production structure centered on competitive upstream integrated production.

The Nagoya Works is one of the world’s leading steelworks in optimal integrated manufacturing technology of steel sheets for automobiles. It is also positioned as Nippon Steel’s main integrated manufacturing base of high-grade steel sheet, with competitive capability in product development and response to customers. The Nagoya Works plays a role by supplying upstream-processed materials of high-grade steel sheet to other steelworks. As about 20 years have passed since its last relining, we have decided to reline the No. 3 blast furnace at this time in order to maintain and further enhance competitiveness of the Nagoya Works’ upstream integrated production, which is a key to appropriately respond to customer needs and to prevail jointly with customers in global competition.
　
After the relining, advanced IT and other leading-edge technologies from Japan and abroad will be adopted in the No. 3 blast furnace to realize stable production and higher productivity.

[Outline of the relining of the No. 3 blast furnace of the Nagoya Works ]

• Furnace capacity:    　  4,425m³ (4,300m³ at present)
• Relining period:    　　  First half of 2022 (plan)
• Investment amount:     Approximately \49 billion (plan)
  
• Constructor:                Nippon Steel Engineering Co., Ltd. and others
• Other:                         The No. 3 blast furnace began operation in April 2000.
  

We are mindful of maintaining financial soundness in executing capital spending. In the medium-term management plan (fiscal 2018 to fiscal 2020), we are striving to reduce the amount of capital spending by about \200 billion from \1.7 trillion to \1.5 trillion by strictly selecting and pursuing efficiency in capital spending. The relining of the No. 3 blast furnace will be included in the \1.5 trillion spending plan, while we will consider ways to further reduce capital spending.

In the medium-term management plan, the amount of asset compression has been raised from \100 billion in the initial plan to \400 billion. We will raise the amount of asset compression to over \500 billion and strive to improve cash flow.

Nippon Steel will continue to carry out the selection and concentration process in capital spending in order to establish an optimal domestic production structure, and at the same time focus on financial discipline in cash management with the aim of maximizing its corporate value.

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