Bloomberg reported that Kobe Steel Limited cut production of ship parts by about 10% and forecast it will miss a sales target after the global recession ended a 5 year boom in marine transportation.

Mr Soichi Kimoto GM of planning and administration at Kobe Steel said that the company’s casting and forging sales will fall short of target by several billion yen in the year ending March 31 as shipyards request delivery delays.

He said that "The shipbuilding industry started to see the impact of the recession later than other manufacturers. Some of our customers asked us to postpone the timing of shipments by several months at most. The crankshaft plant was operating at 10% below capacity."

Kobe Steel, which will complete a JPY 30 billion expansion of the Takasago factory by April, is also unlikely to operate the new facilities at capacity and is considering a cut in working days and other cost reduction measures.

Mr Kimoto said that sales at the casting and forging division rose to about JPY 60 billion last fiscal year from JPY 50 billion and the business had planned to match that level this year.

Kobe Steel posted total sales of JPY 2.18 trillion last fiscal year from operations including output of steel, aluminum and copper products, cranes and compressors. It competes with South Korea’s Doosan Heavy Industries & Construction Co, Hyundai Heavy Industries Limited and Japan’s Sasebo Heavy Industries Co in making crankshafts.

Mr Kimoto said that about 80% of the company’s crankshafts are used in container ships, oil tankers, bulk carriers and other vessels built by Japanese yards and the company will continue to place priority on domestic sales. Exports are mostly to China where the company will seek to increase sales through a joint venture with Japanese partners. He added that "We will sustain ties with Japanese shipbuilders, which have stable operations and fewer order cancellations."

(Sourced from www.bloomberg.net)