October 07, 2008

Nippon Steel and other 4 steelmakers in Japan to cut more costs - Nikkei Says

The Nikkei English News citing industry officials reported that Nippon Steel Corp and four other Japanese steelmakers will more than double cost cuts this fiscal year amid a surge in raw materials prices.

The report said that Japan's top five steelmakers aim to cut costs by a combined JPY 210 billion (USD 2 billion) as compared with the JPY 87 billion they saved in the fiscal year ended March 31st 2008.

The report added that Nippon Steel will aim for a reduction of JPY 100 billion, almost three times the level it achieved a year earlier, by increasing the use of lower grade and less expensive materials. Sumitomo Metal Industries Ltd and Nisshin Steel Co will seek to improve efficiency by cutting marketing and other expenses.

The Nikkei said that surging iron ore and coking coal prices will significantly squeeze profits at steel companies this year. Nippon Steel last month predicted a 41% decline in profit for this year.