Japanese Kawasaki and NKK launch JFE Holding Inc.
As previously scheduled, JFE Holdings Inc. was set up by NKK Corp. and Kawasaki Steel Corp. last week. This is the first step taken to form JFE Group and become a large integrated steelmaker. Now that the JFE Holdings is initiated, the Japanese steel industry is divided into two major steelmakers namely Nippon Steel Corp. and JFE Group. The company is aiming to become financially strong which the management believes is what keeps the business afloat. NKK and Kawasaki are now the wholly owned subsidiaries of JFE Holdings and are planning to integrate most of their operations. Four steel mills in the country will be reorganized into two one being the eastern Japan steelworks and the other being the western. The group will also cancel two blast furnaces as well as suspending the production lines to provide further efficiency by cutting costs. Another means that the Group plans to actualize in order to improve its financial status is to reduce the interest-bearing outstanding debts of Kawasaki and NKK down by the end of fiscal year of 2005. Group's reorganization is expected to involve some ties with other Japanese and foreign companies. Currently there is a technological connection with German ThyssenKrupp Steel AG on steel plates.