In this issue. No. 382 January Regular Subscription. Feature Story
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1 No. 382 January 2011 Published monthly by Public Relations Center General Administration Div. Nippon Steel Corporation More about Nippon Steel WWW Regular Subscription If you have received the web-version of Nippon Steel News, you are already a registered subscriber, thus no new registration is required. Associates who wish to become subscribers are requested to click on the icon to complete and submit the registration form. In this issue New Year s Message from the President Using Every Measure to Assure Strong Competitive Edge A Series of Steel Art by Masanori Sukenari Beyond Zero There are endless possibilities for an untouched canvas. Gradually, images begin to take shape with the accumulation of new strokes, each representing time and experience. But, far ahead at the end, we wish that we could recreate the truly white canvas with which we began. Masanori Sukenari: Born in 1960 in Fukuoka Prefecture, Mr. Sukenari graduated from the Department of Painting, Musashino Art University. He then received a Steiner scholarship to study abroad at the Akademie der Bildenden Kunste Munchen in Germany for the academic year Subsequently, he remained in Germany where in 1997 he held a private exhibition entitled OPERA. Following this, he held a private exhibition at the House of Art in Czechoslovakia in 2003, participated in the Sixth Shanghai Biennale in 2006, and in 2007 received the Communications Special Award of the Ermanno Casoli Art Prizes. In 2002, he assumed his current post as part-time instructor at Tokyo Zokei University.
2 New Year s Message from the President Using Every Measure to Assure Strong Competitive Edge Shoji Muneoka Representative Director and President Nippon Steel Corporation A Harsh Business Environment In the summer of 2010, just as the Japanese economy was treading a path of moderate recovery, the economic environment quickly turned downward and currently remains at a standstill due mainly to the combined effect of economic stimulus programs coming to an end and the sharp appreciation of the yen. Given recent conditions in the steel market, such as the slump in the construction sector and the increase in transplant operations by the major manufacturing indus- tries, it is diffi cult to foresee a timely return to the 80 million-ton levels of domestic steel demand that were registered in the past. Meanwhile, even though the expansion in global steel demand is forecasted to continue, we face fiercer competition in overseas markets because of the steep rise in the value of the yen. On the supply side, we have seen the startup of modern steel mills abroad in rapid succession. This, combined with the rising competitive position of foreign steelmakers vis-à-vis exports to Japan resulting from the yen s appreciation, is fostering mega-competition especially in mediumgrade steel products. In addition, inflation in the pricing of natural resources is expected to continue for some time, leading to a harsh business environment in which we will fi nd it diffi cult to secure profi ts despite high production levels.
3 Tasks Facing the Steelmaking and Steel Fabrication Sector We will grapple with the following three major tasks in this year. Reinforcing the Foundation of Our Domestic Operations Our fi rst aim is to ensure a production fl oor with strong on-site expertise and capabilities. It must be free of both workplace injuries and operational troubles and be capable of providing a stable supply of products that are highly rated by our customers. In the future, our pursuit of safety will focus on eliminating injuries through joint efforts in both software and hardware management by our production floors and our cooperative partner companies. Every effort will also be made to secure stable, trouble-free operations through cooperation among our operating and maintenance sectors. We also intend to exert steady effort in addressing 6S workplace-upkeep campaigns and activities to improve our production foundations key factors underlying strong on-site expertise and capabilities. The six S s refer to six Japanese words seiri, seiton, seiso, seiketsu, shitsuke, and saho. These words may usually be exchanged with six nearly synonymous English terms tidiness, orderliness, neatness, cleanliness, discipline, and manners. On the strength of this commitment, we will use our equipment skillfully and will improve our quality and efficiency as far as feasible. Also, through the horizontal promotion of JK (Jishu Kanri or workers self-motivated management) activities and other best practices in each of our steelworks and by closely monitoring the moves of other companies, we will undertake the tasks
4 required for stable operations and improved effi - ciency. Further, we will press ahead with structuring the best and most optimal production system on a company-wide basis, one that will extend beyond the framework of our steelworks and business sectors. We will strive to create innovative solutions, thereby promoting the development of products that exceed customer expectations. To this end, our marketing and production sectors intend to exert concerted efforts in furthering research and development in close alliance with our customers. As we continue to meet emerging needs in energy, the environment, infrastructure, and other growth areas, we now face several acute issues how to deal with the upward spiraling cost and deteriorating quality of raw materials and the challenge of curbing global warming. Making full use of our technology, we will resolve all such issues and tasks. Today s steel market is characterized by a change in demand structure due to the increasing use of overseas transplants by our customers and by intensifying competition at home and abroad. Now is the time for us, through close collaboration with our production floors, to reinforce our marketing activity by the timely and opportune delivery of products that meet customer needs. Primarily for overseas markets, we will draw on Nippon Steel s proficiency in high-performance products to promote proposals for and the development of new products destined for growth fi elds such as energy and the environment. As for the raw materials and fuels that now account for the majority of variable production costs, we will use every effort to secure stable procurement at competitive price levels. In a market environment that will remain tight, we are committed to tapping new sources, including the acquisition of equity stakes in new mines, and to developing new technology for harnessing new resources. Structuring a Global Production and Supply System Particularly for overseas alliance projects already in operation, our emphasis will be focused on securing a solid profi t foundation and on working out and implementing future programs timed to changes in demand. For alliance projects still underway, including automotive steel sheet and tube mills in Mexico and India and ventures to manufacture construction and infrastructure materials in Vietnam and Africa, we will focus on smooth start-ups aimed at quickly delivering products to the customer. In other parts of the world and in new product areas too, we are ready to be the first to establish a production system that will allow us to deliver products to our customers in an optimal manner. Capitalizing on our high technological capabilities and our business experience abroad, we will use every available means to build a tri-polar global production structure based in Japan, Asia, and the Americas/Pan-Atlantic region as advocated in the Medium-Term Management Plan for FY Strengthening Our Operational Foundation We intend to steadily press ahead with reforming our management practices and upgrading our product-making skills. In order for productionfloor ideals and decisions to be carried out with high rapidity, we will, henceforth, endeavor to
5 implement specifi c measures in fi ve areas business manner, awareness, and corporate culture; rules for key administrative operations; corporate organization and decision-making systems; management of partnerships between the production fl oor and our cooperative partner companies; and employee allocation and human resources training. Particularly, since human resources training and the transfer of intergenerational skills and techniques are pressing concerns, we will be committed to both of them on a sustained basis. A similar emphasis will be placed on reinforcing relationships with the staff members of cooperative companies so that we can exchange frank opinions in the pursuit of problem solving. In order for Nippon Steel to be a company fully worthy of trust by society at large, we will strive to strengthen our operational conduct in a manner that will allow us to observe environmental regulations while reflecting the actual state of our production floors. For a solution to the issue of global warming, we will use our technological capabilities in three ecological approaches: ecoprocesses, eco-products, and eco-solutions. To promote legal compliance, we will observe the corporate principle of continuing to be a trusted and responsible member of our society, and we will make the utmost effort to devise a program whereby each employee strictly adheres to all legal restrictions and to build a system of checks against any illegal acts. Tasks in Other Business Sectors We will secure a fi rmer presence through autonomous business operations and we will share and consolidate the technological strengths of our individual group companies. These endeavors will generate robust synergistic effects that will help to raise the competitiveness of the entire Nippon Steel group as a leading entity with comprehen- sive capabilities. Engineering and Construction: We will not only strive to capture domestic projects, but also enhance our com- Steel pier of new D-Runway at Tokyo International Airport: an example of successful achievements derived from the comprehensive capabilities of the Nippon Steel group companies
6 Back to Top Back mitment to infrastructure-related investment projects in newly emerging and other countries that have growth potential. Urban Development: While controlling business risks, we will focus on grasping market needs and will engage in the implementation of projects capable of utilizing our distinctive advantages. Chemicals: With coal-tar chemicals and functional materials as our core businesses, we will reinforce our competitive foundations and our commitment to growth areas by pursuing higher business effi ciencies. New Materials: In our mainstay businesses tied to the electronics industry and in the promising areas of energy and the environment, we will strive to reinforce competitiveness, expand the scope of our business activity, and build a stable business foundation. System Solutions: By strengthening both our customer-oriented services and our cost competitiveness, we will tackle the tasks of expanding our target customers and broadening the scope of new business operations. Towards World-leading Comprehensive Strengths In any operating environment, we will continue our efforts to refi ne the starting point of monodzukuri, or the art of product making. At the same time, we will tackle the above-mentioned tasks to attain two goals: establishment of a tri-polar global production structure and emergence as the world s leading steelmaker, with an annual production capacity of 50 to 60 million tons of crude steel. I hope that 2011 will be the year that all Nippon Steel group companies employ every available means to fully demonstrate our comprehensive capabilities and that we will continue to contribute to society by capitalizing on our core steelmaking and steel fabrication operations. All copyrights reserved by Nippon Steel Corporation HEAD OFFICE 2-6-1, Marunouchi, Chiyoda-ku, Tokyo , Japan Phone: Fax: OVERSEAS OFFICES New York Phone: Fax: Chicago Phone: Fax: Mexico Phone: Fax: Düsseldorf Phone: Fax: Sydney Phone: Fax: Perth Phone: Fax: More about Nippon Steel on the website: Singapore Phone: Fax: Bangkok Phone: Fax: São Paulo Phone: Fax: Beijing Phone: Fax: Shanghai Phone: Fax: Guangzhou Phone: Fax: New Delhi Phone: Fax:
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