Japanese Kawasaki Steel, NKK to close plants

Japanese Kawasaki Steel, NKK to close plants

Two of the largest Japanese steelmakers, NKK and Kawasaki, are planning to close two of their 11 blast furnaces, sources report. The No. 5 at Chiba and No.1 at Mizushima will close as part of a five-year program to save $620 million. The firms signed their merger contract and plan to do business under the name JFE Group, starting in April 2003 while formal integration is set to take place in October. Sources say the move is in line with plans by both firms to cut combined annual production capacity by 2 million tons or 10%. Both companies indicate they see the move as positive and will enable them to share competitive technology, reduce procurement costs as well as share common facilities. Both firms reportedly will consolidate downstream operations which is part of a plan to shave $623 million off costs by the end of 2005. Additional closures are planned as well which both firms report will create major financial savings overall.