Nippon Steel Looking to Double Its U.S. Steel Output in 5 Years, Says CEO
During an interview with The Yomiuri Shimbun on Tuesday, Hashimoto outlined a plan to achieve the goal by improving production efficiency at U.S. Steel Corp., its wholly owned subsidiary. The newly purchased firm is also to be equipped with cutting-edge technology.
Globally, Nippon Steel plans to increase its crude steel output from 58 million tons at present to 100 million tons by expanding production in India and Thailand, said Hashimoto.
At U.S. Steel, whose buyout took about 18 months to pull off, Nippon Steel plans to invest $11 billion (about ¥1.6 trillion) by 2028 to upgrade aging production facilities, added Hashimoto.
U.S. Steel currently produces about 11 million tons of crude steel in the United States, maintaining a U.S. market share of around 15%.
Nippon Steel plans to improve U.S. Steel's product lineup by providing advanced manufacturing technologies, such as for high-performance electrical steel sheets, which are used in large transformers and motors for electric vehicles.
By improving production efficiency, the firm aims to boost yield and reduce costs.
'Through our new investments, we will expand capacity, broaden our production offerings and double production,' Hashimoto said.
Though 40 engineers have been dispatched to the United States, Hashimoto indicated that more personnel would be needed to support the move to greater capacity and an enhanced product lineup.
The U.S. government holds a 'golden share' in U.S. Steel, giving it veto power over key management decisions. While the government could change how it involves itself in the firm after an election, Hashimoto said, 'I am not concerned because the U.S. government's goal of restoring the manufacturing industry aligns with Nippon Steel's management strategy.'
By raising global crude steel production to 100 million tons, Nippon Steel aims to become the world's leading steel manufacturer. Acknowledging that ArcelorMittal S.A., a European giant in the industry, is currently the 'actual world leader,' Hashimoto said, 'We must close the gap and then overtake them.'
In 2019, Nippon Steel and ArcelorMittal jointly acquired a steel manufacturer in India. The companies now plan to increase steel output by 15 million tons and establish one of the world's largest steel mills there.
Additionally, Nippon Steel plans to increase its production capacity in markets where it operates independently, such as Europe and Thailand.
The steelworks owned by U.S. Steel in Slovakia could be expanded to more than twice their current capacity. Nippon Steel also plans to continue investing in facilities in Thailand, aiming to secure a majority of the market.
With China continuing to export low-priced steel to the global market, Hashimoto argued that 'To avoid negative impacts from China, we can't allow it to dominate crucial markets like the United States, India, Europe and Thailand.'
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