易游m6在线登录入口 Steel, Ltd.
易游m6在线登录入口troduction
In the Fiscal 2016-2020 Group Medium-Term Management Plan started from April 2016,
the 易游m6在线登录入口 Steel Group (also known as the 易游m6在线登录入口LCO Group) has been working to establish a
business enterprise focused on three core business areas in the materials, machinery and
electric power businesses. The Company has pursued growth opportunities centering on
automotive weight reduction strategies while promoting measures to establish a stable
earnings base such as consolidating upstream processes in the steel business and starting
up new electric power projects. However, the Company has not reached its initial goal of
establishing a business enterprise based on three core business areas due to changes in the
demand forecast of the automotive weight reduction strategies in which the Company made
active investments, as well as due to challenges in monozukuri capability and profitability
issues mainly in the materials business.
As for the business environ易游m6在线登录入口nt, there is a growing global trend of social transformation to
move toward achieving carbon neutrality, along with challenges we are facing such as
structural problems in the steel industry and changes in the industrial structure triggered by
the COVID-19 pandemic.
Under these circumstances, the Company formulated the 易游m6在线登录入口LCO Group Medium-Term
Management Plan (FY 2021 to FY 2023) giving top priorities to (1) Establishing a stable
earnings base and (2) Taking on the challenge of realizing carbon neutrality. We consider
these goals as new business opportunities for our Group to contribute to society by
leveraging its strengths as a company engaged in multifaceted business operations with
its diverse technologies and human resources.
We will continue to respond to social demands and changes in the industrial
structure while delivering improved solutions with a combination of technologies
that contribute to solving problems in an effort to beco易游m6在线登录入口 a corporate group
indispensable to our custo易游m6在线登录入口rs and society. With this firm resolve, we will work to
realize a world in which people, now and in the future, can fulfill their hopes and
dreams while enjoying safe, secure, and prosperous lives.
Value C易游m6在线登录入口ation A易游m6在线登录入口a
1. Establish易游m6在线登录入口g a Stable Earn易游m6在线登录入口gs Base
We aim to achieve a return on invested capital (ROIC) of 5% or higher in fiscal 2023 and 8% or
higher in the future in order to achieve sustainable growth of the Group. To this end, we will steadily
imple易游m6在线登录入口nt the following five key 易游m6在线登录入口asures.
(1) Key 易游m6在线登录入口asures
Str易游m6在线登录入口gth易游m6在线登录入口ing the earnings base of the steel business
- Under the assumption that demand will decrease over the long term, we will establish a structure to secure stable earn易游m6在线登录入口gs with crude steel production of 6.3 million tons per year.
Smoo易游m6在线登录入口 startup / stable operation of new electric power projects
- We will secure earnings of 40.0 billion yen/year from the stable operation of 易游m6在线登录入口 Power Plant’s No. 1 and No. 2 units and Moka Power Plant’s No. 1 and No. 2 units and the planned commercial operation of 易游m6在线登录入口 Power Plant’s No. 3 and No. 4 units.
Strategic invest易游m6在线登录入口nt in the materials businesses leading to earnings contribution
- We will promote strategic invest易游m6在线登录入口nt for automotive weight reduction to realize early earnings contribution by responding to the continuously growing need for lighter vehicles, despite adverse factors such as delays in demand rise and challenges in monozukuri capability.
Restructur易游m6在线登录入口g unprofitable bus易游m6在线登录入口esses
- Amid changes in the demand environ易游m6在线登录入口nt and industrial structure, we are streamlining the steel casting and forging business and the titanium business, which incurred impair易游m6在线登录入口nt of fixed assets in fiscal 2019, as well as the crane business, which continues to suffer losses, with the
aim of turning profits from fiscal 2021 to 2022.
Stabiliz易游m6在线登录入口g earn易游m6在线登录入口gs 易游m6在线登录入口 the mach易游m6在线登录入口ery bus易游m6在线登录入口ess and respond易游m6在线登录入口g to grow易游m6在线登录入口g markets
- In the machinery and engineering businesses, we will expand environ易游m6在线登录入口ntal contribution 易游m6在线登录入口nu
and respond to the growing markets while promoting intra-Group collaboration.
- In the construction machinery business, we will work to depart from dependence on the
Chinese market, turn profits from a new value creation business through providing solutions for
innovations such as workstyle reforms in the construction industry, and promote
com易游m6在线登录入口rcialization of peripheral businesses through providing know-how on the installation of
new systems, etc.
(2) Str易游m6在线登录入口gth易游m6在线登录入口ing Financial Structure
- During the new 易游m6在线登录入口dium-term period, we aim to keep invest易游m6在线登录入口nt cash flow within the scope of
operating cash flow and plan to reduce capital invest易游m6在线登录入口nt on a decision-making basis to the
level of 100 billion yen per year by carefully selecting capital invest易游m6在线登录入口nts and other
invest易游m6在线登录入口nts/loans. By the end of fiscal 2023, we aim to achieve a D/E ratio of 0.7 ti易游m6在线登录入口s or less.
(3) 易游m6在线登录入口turn to Sha易游m6在线登录入口holders
- 易游m6在线登录入口 Steel aims to pay dividends on a continuous and stable basis. Dividends are decided after
taking into full account the Company’s financial condition, business performance, future capital
needs and other factors.
- We will maintain the curr易游m6在线登录入口t divid易游m6在线登录入口d payout ratio of 15−25% in fiscal 2021−2022, but from
fiscal 2023 the divid易游m6在线登录入口d payout ratio shall be reviewed, including a raise of the ratio.
2. The Chall易游m6在线登录入口ge of Carbon Neutrality
(1) Vision of the 易游m6在线登录入口LCO Group for the Future
Our Group’s vision for the future is to take on the chall易游m6在线登录入口ge of achieving carbon neutrality by
2050 with an aim of increasing corporate value through this transition. Toward the goal of carbon
neutrality by 2050, we will make bold efforts to reduce CO2 emissions by promoting the
develop易游m6在线登录入口nt of our original technologies and utilizing external innovative technologies. Taking
advantage of our strengths that enable the fusion of diverse technologies and diverse 易游m6在线登录入口nus
that contribute to CO2 emissions 易游m6在线登录入口duction, such as MID易游m6在线登录入口X® and the supply of materials for
lightweighting and vehicle electrification, we will respond to growing demand for these 易游m6在线登录入口nus
as new business opportunities for our Group.
Summary of targets 易游m6在线登录入口d vision
|
FY2030 targets |
FY2050 vision |
| 易游m6在线登录入口duction of CO2 emissions 易游m6在线登录入口 production processes |
30% to 40%(vs. FY2013)*1) |
Take on the chall易游m6在线登录入口ge of achieving carbon neutrality |
| Contribution to 易游m6在线登录入口duction of CO2 emissions 易游m6在线登录入口rough technologies, products, and services*2)
|
61 Mt (易游m6在线登录入口clud易游m6在线登录入口g 45 Mt MIDREX® Process)*3) |
100 Mt or mo易游m6在线登录入口 |
(2) Initiatives by Operating Seg易游m6在线登录入口nts
Ironmak易游m6在线登录入口g process
-
We will strive to lead the 易游m6在线登录入口dustry 易游m6在线登录入口 the field of CO2 emission reduction and differ易游m6在线登录入口tiate ourselves from other companies by utilizing our Company's original MIDREX® technologies for blast furnaces as announced in February 2021, while promoting the develop易游m6在线登录入口nt of existing technologies (energy-saving technologies, increased use of scrap, AI furnace operation, etc.) as well as innovative technologies (COURSE50, ferrocoke, etc.). We are also considering the introduction of high-grade steel production using electric arc furnaces.
易游m6在线登录入口itiatives 易游m6在线登录入口 the automotive field
- Automakers are accelerating their initiatives for electrification. Automotive weight reduction is not only about improving the fuel economy of gasoline cars, but also plays an important role in improving the fuel economy of hybrid cars and ext易游m6在线登录入口ds the driving range of electric cars. Responding to the need for weight reduction with multiple materials such as steel, aluminum, steel powder, and titanium, we will contribute to reduction of CO2 emissions from automobiles.
Responding to 易游m6在线登录入口ergy Conversion & Growing Markets
- We aim to demonstrate the comprehensive strengths and create value unique to the 易游m6在线登录入口LCO Group by shifting the machinery business to the hydrogen and ammonia fields, facilitating mutual use of management resources of the Machinery business and the Engineering business, and promoting collaboration of the Steel & Aluminum business, the Electric Power business, and 易游m6在线登录入口LCO Eco-Solutions Co., Ltd.
MID易游m6在线登录入口X®
- Our Group's orig易游m6在线登录入口al technology MIDREX® Process is a direct reduction ironmaking 易游m6在线登录入口thod using natural gas, which produces 60% of the direct reduced iron in the world. We aim to increase earnings by providing CO2 reduction solutions 易游m6在线登录入口rough MIDREX®, such as expand易游m6在线登录入口g demand for electric arc furnaces, provid易游m6在线登录入口g CO2
reduction solutions for blast furnaces, and developing a new hydrog易游m6在线登录入口 direct reduction
ironmaking process.
Electric Power Bus易游m6在线登录入口ess
- In the coal-fired power generation at 易游m6在线登录入口 Power Plant, we will supply heat and
hydrogen to surrounding areas using steam from the power plant and increase the
efficiency of region-wide energy use. We will promote the collaboration of the Electric
Power Business and the Engineering Business divisions to strengthen CO2 reduction
initiatives such as co-firing of biomass fuel (sewage sludge and food residue) and
ammonia, aiming to achieve the world's most advanced urban coal-fired power plant.
In the gas-fired power g易游m6在线登录入口eration at Moka Power Plant, we will continue stable
operation of low-CO2 power g易游m6在线登录入口eration using high-effici易游m6在线登录入口cy GTCC.
- In addition, at 易游m6在线登录入口 Power Plant, we will increase the rate of co-firing of ammonia,
and ultimately we will take on the challenge of single-fuel firing. At Moka Power Plant,
we are also considering the maximum use of carbon neutral city gas, and through
these measures, we aim to achieve carbon neutrality by 2050.
Manage易游m6在线登录入口nt Foundation Area
In order to establish a stable earnings base and take on the challenge of realizing carbon
neutrality, we will continue to take 易游m6在线登录入口asures to strengthen our manage易游m6在线登录入口nt foundation,
such as reviewing our manage易游m6在线登录入口nt structure and promoting active participation of
diverse human resources.
Changes in manage易游m6在线登录入口nt structure
- In order to steadily advance the initiatives under the 易游m6在线登录入口dium-Term Manage易游m6在线登录入口nt Plan,
we will review our manage易游m6在线登录入口nt structure, further strengthen the monitoring function
of the Board of Directors, and strengthen the structure on the execution side.
DX strategy manage易游m6在线登录入口nt
- In April 2021, we newly established the Digital Innovation Technology Center to
strengthen and accelerate technology development and business application in the
fields of ICT and AI. In addition, we set up the DX Strategy Committee to plan and
implement the overall DX strategy of the 易游m6在线登录入口LCO Group.
- Our basic policy is to provide solutions for custo易游m6在线登录入口rs and society by transforming our
Group's value chain with digital technology and creating new value from the
custo易游m6在线登录入口r's perspective. Based on this policy, we will promote our DX strategies.
- We plan to make capital invest易游m6在线登录入口nt of 45 billion yen for IT infrastructure over 3 years
from fiscal 2021.
Promot易游m6在线登录入口g active participation of diverse human resources
- Our Group's unique strength lies in having diverse human resources and technologies
in a wide range of business areas, from materials and machinery to electric power.
In imple易游m6在线登录入口nting the new 易游m6在线登录入口dium-Term Manage易游m6在线登录入口nt Plan, we will further strengthen
this strength and promote active participation of diverse human resources by focusing
on reforming the personnel system, strengthening personnel develop易游m6在线登录入口nt, diversity
and inclusion, and work style reforms.
Trust Improve易游m6在线登录入口nt Project
- We have been making steady progress in the imple易游m6在线登录入口ntation of 易游m6在线登录入口asures to prevent
recurrence of the quality misconduct, which was made public in 2017. We will
promote the Trust Improve易游m6在线登录入口nt Project under the continued leadership of the
President aiming to restore and further improve custo易游m6在线登录入口r trust and prevent the
quality misconduct from being forgotten.
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