Tokyo, Feb. 7 (Jiji Press)–Nippon Steel Corp. said Friday it will shut down subsidiary Nippon Steel Nisshin Co.’s Kure Works in Hiroshima Prefecture, western Japan, by the end of September 2023.
As part of measures to streamline operations, the company is set to idle a total of four blast furnaces at Kure and other steelworks.
Nippon Steel is braced for a record consolidated net loss of 440 billion yen in the current year ending in March because it will book some 400 billion yen in impairment losses on production facilities.
The Japanese steel market is shrinking, while global competition has intensified due to the rise of Chinese steelmakers.
Nippon Steel aims to speed up moves to improve its earnings profile by drastically consolidating production facilities.
At a press conference, Nippon Steel Executive Vice President Akio Migita hinted at the possibility of conducting additional restructuring.
“We’ll take steps in accordance with changes in the situation,” he said.
It will be the first time for Nippon Steel to close integrated steelworks with any blast furnace.
The company promised to make the utmost efforts to keep employees, including 1,600 workers at group companies and people working for subcontractors.
Nippon Steel is unlikely to solicit voluntary early retirements.
The company had announced plans to halt one of the two blast furnaces at Kure Works and one Kokura area blast furnace at its Yawata Works in Kitakyushu in the southwestern prefecture of Fukuoka. Now it will move up the schedule to idle the two blast furnaces.
On Friday, the company disclosed its decision to suspend the remaining blast furnace at Kure and a furnace at its Wakayama Works in western Japan.
As a result, the group’s annual crude steel production capacity will decrease by 10 pct, or some 5 million tons. The group has 11 more blast furnaces in Japan.