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On May 9, 2003 world's third largest steelmaker Nippon Steel Corp.(NSC), located in Tokyo, reported Yen 51.69 billion ($442 million) loss for fiscal year 2002 ending in March 31, 2003, attributing this result to the restructuring of its financially troubled subsidiary Nippon Steel Chemical Co. and sharply increasing stockholding losses mostly in banks. Loss in previous fiscal year was recorded as Yen 28.4 billion.
Despite continued weakness of the economic situation in Japan, high inventory levels, and intense competition from JFE, formed last year by other Japanese steelmakers NKK Corp. and Kawasaki Steel Corp., Nippon Steel raised crude steel production in fiscal 2002 by 14% up to 2.99 million mt and sales from Yen 2.581 trillion to Yen 2.749 trillion ($23.49 billion) with a 6.5% increase, due to its cost cutting efforts, strong exports to Asia and US and high global steel prices. These reasons also helped pretax profit to increase 311.1% and operating profit by 95.7%, respectively to Yen 68.88 billion and Yen 142.96 billion.
Nippon Steel is anticipating to make a net profit of Yen 70 billion($598.3 million) and sales reach to Yen 2.8 trillion($23.9 billion) for the current fiscal year ending in March 2004. Furthermore company gave approval for plans to decrease debt from Yen 1.94 trillion down to Yen 1.6 trillion by 2006.
Apart from above, analysts predict that the collaboration assembled in November 2002 between Nippon Steel, Sumitomo Metal Industries and Kobe Steel Ltd in order to increase their business efficiency and oppose JFE Holdings Inc, seems to be the first step of the realignment in the Japanese steel industry.