Thursday, 13 Oct 2011
FT reported that JFE Steel is preparing a plan to build a new USD 3 billion steelmaking unit in South East Asia.
If the company goes ahead with the plan, it would mark the first time since the Second World War that any large Japanese steelmaker has built a large integrated plant outside Japan.
Mr Eiji Hayashida CEO of JFE told the Financial Times that a decision over going ahead with such a plant was likely within the next two years and could possibly be with a local industry partner.
He added that "It' the only way I can see to provide for the possibility of longer term growth for JFE, since I can see the opportunities for providing more steel in the company’s main traditional markets will be limited."
The countries JFE is most likely to choose for a new site includes Thailand, Malaysia, Vietnam and Indonesia. Possible collaborators with JFE could include the steelmakers JSW of India and Thailand's Sahaviriya Steel Industries.
According to Mr Hayashida, in each of these countries, the longer term growth prospects for steel seemed better than in Japan, China and South Korea, which have acted as the main growth locomotives for JFE over the past 20 years.
In 2010, JFE made 32.7 million tonnes of steel, behind the 36.1 million tonnes of steel produced by Nippon Steel, its larger Japanese rival. This year JFE’s output is likely to be down to 31 million tonnes, of which about 17 million tonnes will probably be sold in Japan.
Mr Hayashida said that manufacturing in Japan had settled into what he thinks will be a long term steady decline as a result of rising environmental regulation, the strong yen and problems over guaranteeing energy supply at a reasonable cost.
As for China, he thinks the economy is likely to grow but at a slower rate than recently, partly because of concerns by the Chinese authorities about keeping inflation under control.
The JFE head also thinks growth in demand for steel from China will be reined back due to what he feels will be a slowdown in exports of goods from China to Europe over the next two years, as a result of the eurozone crisis.
He said that "I'm very worried about the damage that I think is being done to the European economy by the economic uncertainties. In my view these problems are going to cause damage to the Chinese economy as well."
(Sourced from Financial Times Limited)
FT reported that JFE Steel is preparing a plan to build a new USD 3 billion steelmaking unit in South East Asia.
If the company goes ahead with the plan, it would mark the first time since the Second World War that any large Japanese steelmaker has built a large integrated plant outside Japan.
Mr Eiji Hayashida CEO of JFE told the Financial Times that a decision over going ahead with such a plant was likely within the next two years and could possibly be with a local industry partner.
He added that "It' the only way I can see to provide for the possibility of longer term growth for JFE, since I can see the opportunities for providing more steel in the company’s main traditional markets will be limited."
The countries JFE is most likely to choose for a new site includes Thailand, Malaysia, Vietnam and Indonesia. Possible collaborators with JFE could include the steelmakers JSW of India and Thailand's Sahaviriya Steel Industries.
According to Mr Hayashida, in each of these countries, the longer term growth prospects for steel seemed better than in Japan, China and South Korea, which have acted as the main growth locomotives for JFE over the past 20 years.
In 2010, JFE made 32.7 million tonnes of steel, behind the 36.1 million tonnes of steel produced by Nippon Steel, its larger Japanese rival. This year JFE’s output is likely to be down to 31 million tonnes, of which about 17 million tonnes will probably be sold in Japan.
Mr Hayashida said that manufacturing in Japan had settled into what he thinks will be a long term steady decline as a result of rising environmental regulation, the strong yen and problems over guaranteeing energy supply at a reasonable cost.
As for China, he thinks the economy is likely to grow but at a slower rate than recently, partly because of concerns by the Chinese authorities about keeping inflation under control.
The JFE head also thinks growth in demand for steel from China will be reined back due to what he feels will be a slowdown in exports of goods from China to Europe over the next two years, as a result of the eurozone crisis.
He said that "I'm very worried about the damage that I think is being done to the European economy by the economic uncertainties. In my view these problems are going to cause damage to the Chinese economy as well."
(Sourced from Financial Times Limited)
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