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Nippon Steel to Invest 850 Billion Yen Over Next 3 Years

Posted on: Wednesday, 14 December 2005, 12:00 CST

By Kyodo News International, Tokyo

Dec. 14--TOKYO -- Nippon Steel Corp. said Wednesday it will invest 850 billion yen from fiscal 2006 to fiscal 2008 to enhance its production capacity for high-grade steel and improve its technological prowess.

Nippon Steel, the country's largest steelmaker, has set a target operating profit for fiscal 2008 of more than 540 billion yen, according to its consolidated mid-term business plan, released Wednesday.

Speaking at a news conference, Nippon Steel President Akio Mimura said the company is also considering setting up the world's largest class of blast furnace in Oita when it carries out a reconfiguration of the existing furnace there, scheduled for fiscal 2009.

The company plans to invest about 230 billion yen to strengthen its capabilities to produce high-grade steel at its works in Nagoya and Kimitsu in Chiba Prefecture, the business plan said.

After the enhancement, Nippon Steel expects its production capacity of high-grade steel for automakers and shipbuilders will increase by about 2 million tons, with its crude steel output in fiscal 2008 forecast to reach around 35 million tons.

On its structural reform, the company plans to spin off its engineering and new material business operations into two separate companies by July 2006.

Under the planned new structure, Nippon Steel will have three other companies under its umbrella. These will be companies doing business in the areas of urban development, chemical and computer system services.

In fiscal 2008, Nippon Steel seeks to reduce its interest-bearing debt to less than 1 trillion yen, down 100 billion yen from the current level.

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Copyright (c) 2005, Kyodo News International, Tokyo

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Source: Kyodo News International, Tokyo

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