Nippon Steel

Last updated
Nippon Steel Corporation
Native name
日本製鉄株式会社 (since April 2019)
Romanized name
Nippon Seitetsu kabushiki gaisha
FormerlyNippon Steel & Sumitomo Metal Corporation (2013-2019)
Type Public KK
TYO: 5401
NAG: 5401
FSE: 5401
SSE: 5401
TOPIX Large70 component
Industry Steel
Predecessors
Founded1950;71 years ago (1950)
Headquarters Chiyoda, Tokyo, Japan
Key people
Akio Mimura, Representative Director & President
ProductsSteel, flat steel products, long steel products, wire products, plates, chemicals
RevenueIncrease2.svg ¥6.177 trillion (2019) [1]
Increase2.svg¥114.20 billion (2017) [2]
Increase2.svg¥251.69 billion (2019) [1]
Total assets Increase2.svg¥8.049 trillion (2019) [1]
Total equity Increase2.svg¥3.230 trillion (2019) [1]
Number of employees
105,796 (2019) [1]
Subsidiaries Nippon Steel Engineering
Nippon Steel Materials
Nippon Steel Chemical
Website www.nipponsteel.com

Nippon Steel Corporation (日本製鉄株式会社, Nippon Seitetsu kabushiki gaisha), was formed in 2012 by the merger of the old Nippon Steel and Sumitomo Metal. The old Nippon Steel Corporation [3] was established in 1970 by the merger of Fuji Iron & Steel and Yawata Iron & Steel.

Contents

Nippon Steel is the world's third largest steel producer by volume as of 2019. [4]

History

Early years

Nippon Steel was created by the merger of two giants, Yawata Iron & Steel (八幡製鉄 Yawata Seitetsu) and Fuji Iron & Steel (富士製鉄 Fuji Seitetsu). Beginning in early 1981, however, the company cut production and saw a sharp decline in profit that fiscal year. Forced to close furnaces, the company exhibited a typical Japanese economic aversion to layoffs, opting instead to offer standard early retirement enticements but also less conventional schemes such as a mushroom cultivation venture that used the surplus heat created by steel furnaces to temperature control a fecund fungi complex. [5]

Troubled times

Attributing the drop to higher material costs, the company entered into another troubled year. In 1983, the company reported the end of the fiscal year (March 31) would reveal Nippon Steel was in an even more beleaguered situation. A fall in demand brought about a 39 percent tumble in profits from an already weak previous year. During this time the entire Japanese steel industry struggled in a period of turmoil as other nations such as South Korea, with only a fraction of labor costs, won over business. The company announced a loss in 1986, prompting a determined effort to diversify away from the moribund "smokestack" industrial sector and to provide new work for thousands of employees that would be transferred from closing furnaces.

Diversification

Nippon Steel expanded or further established itself in semiconductors, electronics, a theme park called Space World, software, and even human resources products. The company bucked seven struggling but profitable years when it returned to loss in 1993. Again, thousands of employees would be transferred to new operations. Due to cost-cutting, the company returned to health in 1995. However, Nippon Steel reported earnings in 1999 suffered from an overwhelming charge needed to cover pension costs, a problem not uncommon for shrinking industrial giants. 2002 and 2003 would be back-to-back loss years, but robust demand for steel in the People's Republic of China returned the company to profitability. (However, Nippon Steel had an operating profit for 2002 and 2003. The losses were made of extraordinary losses because of reevaluation of real estate and securities of the company among others.) Following a triple merger of Sumitomo Corporation, Kinzoku Steel Corporation (Sumikin Bussan), and the existing Nippon Steel, NSSC was formed as these companies' conglomerate Stainless Steel division. [6]

Merger

In early 2011, Nippon Steel announced plans to merge with Sumitomo Metal Industries. With Nippon Steel producing ~26.5 million tonnes of steel per year and Sumitomo making ~11 million tonnes, the merged entity would produce close to 37 million tonnes of crude steel per year. This volume of steel output would make Nippon Steel the second largest steelmaker in the world, putting it well ahead of Baosteel - the current number two (making ~31 mt steel / year) - although still well behind ArcelorMittal (who produced 77.5 mt crude steel in 2010).

On October 1, 2012, Nippon Steel formally merged with Sumitomo Metal Industries at a ratio of 0.735 Nippon Steel shares per Sumitomo Metal share. [7] The merged stock is listed (under number 5401, the old Nippon Steel number) as Nippon Steel & Sumitomo Metal Corp. [8] [9] The logistics branches of both companies are announced to be merged on April 1, 2013, under the name "Nippon Steel & Sumikin Logistics Co., Ltd.", wholly owned by Nippon Steel & Sumitomo Metal Corporation. [10] The merged company planned to publish a common fact book in the summer of 2013. [11]

On April 1, 2019, the Japanese name of the company was changed from Nippon Steel & Sumitomo Metal Corporation to Nippon Steel Corporation.

Present

By May 2020, Nippon Steel has announced that it would suspend operations of four furnaces, of which one for permanently, as it booked an annual loss in FY 2019. [12]

Major plant locations

Kimitsu Steel Works Nippon Steel Kimitsu Works.jpg
Kimitsu Steel Works
Nagoya Works Ltd. View from Futamurayama Observation Deck (Winter)1, Toyoake 2010.JPG
Nagoya Works Ltd.
Oita Steel Works (Oita district) Oita nssmc oita.jpg
Oita Steel Works (Oita district)
Yawata Works Ltd. 140721 Yawata Steel Works from RRH Kitakyushu Japan01s3.jpg
Yawata Works Ltd.

Added after Sumitomo merger

Joint ventures

Controversies

On October 30, 2018, the South Korean Supreme Court rejected appeals to overturn a 2013 order requiring Nippon to pay compensation to four South Korean workers who underwent forced labor which occurred during World War II and ordered Nippon to pay each of the workers an individual sum of 100 million won (US$87,700). [18] The four surviving steel workers, who were victims of forced labor which was supervised by Sumitomo, originally filed suit in 2005. [18] A Nippon spokesman called the decision "deeply regretful," while also promising a review of the ruling. [19] The Japanese Minister of Foreign Affairs Taro Kono maintained that the matter "has been resolved following the Treaty on Basic Relations between Japan and the Republic of Korea". [20]

The asset seizure ordered by the Korean supreme court involves Nippon's stake in PNR, the POSCO-Nippon joint venture. [21]

Environmental record

In 2005 the Nippon Steel corporation made a plan to step up its capacity for recycling waste plastics into coke by 30%. Coke is a main resource in steel production. To manage the load they have invested ¥4 billion (about $38.2 million) to install equipment at Oita Mill and set up a second furnace at Kyushu facility. [22]

In 2006 Nippon Steel and Mitsubishi Heavy Industries, Ltd. (MHI) jointly created a high tensile strength steel. The first application this steel was used for was the hulls of container ships. This steel allows the ships to be just as strong without the thick steel that it was requiring for them to grow in size. The smaller thickness allows the ships to attain a greater fuel-efficiency, cutting down on the environmental load of the ships. [23]

Nippon Steel announced a pilot project to process waste food into ethanol in 2006. They have tasked Kitakyushu City with collecting and sorting the food waste and Nishihara Co., a waste management company, with developing new technologies to implement the sorted collecting system. To minimize costs they will use waste heat from an existing incineration facility that had not been effectively utilized, and the residue left after ethanol recovery will be burned in this incinerator. [24]

Nippon Steel has been addressing environmental issues in an integrated manner as part of the overall management since the establishment of the company, aiming at realizing a sustainable society. In 2011, the company was awarded with the Fray International Sustainability Award in Mexico, for its approach in achieving Eco-processes, Eco-products, and Eco-solutions. [25]

See also

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References

  1. 1 2 3 4 5 "Annual Report 2019" (PDF) (Press release). Retrieved 4 June 2020.
  2. "Annual Report 2017" (PDF) (Press release). Retrieved 12 December 2018.
  3. kyujitai: 新日本製鐵株式會社, Shin Nippon Seitetsu kabushiki gaisha
  4. "Top steel-producing companies 2017". worldsteel.org. Retrieved 1 August 2020.
  5. Whymant, Robert. "Jobs mushroom in idle plant: Nippon Steel of Japan goes into mushroom growing business." The Guardian. February 19, 1985.
  6. For Shareholders and Investors Archived 2007-03-15 at the Wayback Machine .” Nippon Steel Corporation.
  7. http://www.japantimes.co.jp/text/nn20121001a5.html
  8. "Nippon Steel & Sumitomo eyes more cost cuts as debuts in weak market". Reuters. 30 September 2012.
  9. "Nippon Steel & Sumitomo Metal Corp: TYO:5401 quotes & news - Google Finance" . Retrieved 24 August 2015.
  10. https://web.archive.org/web/20130626064437/https://www.reuters.com/finance/stocks/SMMLF.PK/key-developments/article/2602624. Archived from the original on June 26, 2013.Missing or empty |title= (help)
  11. "Fact Book" . Retrieved 24 August 2015.
  12. "Nippon Steel books record loss, plans to shut more furnaces". Reuters. 2020-05-08. Retrieved 2020-08-02.
  13. "ArcelorMittal and Nippon Steel Corporation Announce $240 million Expansion at I/N Kote in New Carlisle, Indiana". Bloomberg L.P. 16 April 2008. Retrieved 26 February 2014.
  14. Finch II, Michael (26 February 2014). "Sale of ThyssenKrupp Steel USA clears all regulatory approval". Press-Register . Mobile, Alabama . Retrieved 26 February 2014.
  15. "ArcelorMittal AM/NS Calvert Webpage".
  16. "Nippon Steel sets up joint venture with local firms". November 4, 2011.
  17. "PNR | 소재·화학 | 포스코 그룹사 | 포스코". www.posco.co.kr. Retrieved 2020-08-02.
  18. 1 2 https://www.channelnewsasia.com/news/asia/south-korean-court-infuriates-japan-by-ordering-nippon-steel-to-compensate-wwii-workers-10878852
  19. https://www.reuters.com/article/us-southkorea-japan-labourers-nippon-ste/nippon-steel-regrets-south-korea-court-decision-on-forced-labor-idUSKCN1N40FS
  20. http://koreabizwire.com/japanese-foreign-minister-says-compensation-matter-already-concluded/126718
  21. "South Korea court approves seizure of some of Nippon Steel's assets: Yonhap". Reuters. 2019-01-08. Retrieved 2020-08-02.
  22. "Nippon Steel to expand waste plastic recycling capacity"
  23. "Nippon Creates New Steel"
  24. "Nippon Steel to Process Food Waste"
  25. "Nippon Steel is awarded the Fray International Sustainability Award in Mexico". www.flogen.org. FLOGEN Star OUTREACH.