Kobe Steel - Company History

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Financial history 1955–2026 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded 1905
Origin 鈴木商店
Founding location 兵庫県神戸市
Core business at founding Cast and forged steel products, and cutting tools
Listed 1949
President Katsukawa Yoshihiko President since 2024 (age 64, as of 2026)
Current priority Decarbonisation · Higher value-added Widening sales of direct-reduced ironmaking and of lightweight materials for car bodies
Founding
In September 1905 Suzuki Shoten, a Kobe trading house dealing in sugar and camphor, bought the Kobayashi Seikosho works at Wakinohama and renamed it Kobe Steel Works. In June 1911 it was separated out and incorporated as a joint-stock company with capital of ¥1.4 million, and in March 1912 it began making drills — the first in Japan. Machinery followed in 1915, steel rolling in 1916, and copper and brass products at the Moji works in 1917; from the moment it stood alone it set its products out side by side and kept widening them. When Suzuki Shoten collapsed in the financial panic of April 1927 the company lost its backer and remained an independent firm belonging neither to a zaibatsu nor to a national-policy company. It listed on the Tokyo, Osaka and Nagoya exchanges in May 1949.
The Decision
Rather than narrow itself to a single material, the company kept setting businesses side by side without reaching first place in any of them. It blew in the blast furnace at Nadahama in 1959, merged with Amagasaki Steel in 1965, and in March 1970 built the Kakogawa works, moving from a processor to an integrated steelmaker. In 1983 it acquired Midrex of the United States and with it the technology of natural-gas direct reduction, and in the same year took a capital stake in Yutani Heavy Industries, bringing construction machinery inside as well. Almost the only thing it let go was the whole of its shareholding in the semiconductor joint venture with Texas Instruments, transferred in 2001. Making the divisions compete on their own earnings sped up investment, but it also left quality assurance inside the divisions. The falsification of quality data in aluminium, copper and other products disclosed in October 2017 was a routine rewriting of inspection figures at the sites, and the material had gone to more than 600 customers. A business spread sideways across fields produced dispersed earnings and a vacuum of control at the same time.
Today
What it sells most of is steel; what earns most is not steel. In the year to March 2026 sales were $15.4B (¥2.44tn) and operating profit $821.3M (¥130bn), of which Steel and Aluminium accounted for $6.1B (¥962bn) of sales — 39 per cent of the total — but only $18.3M (¥3bn) of segment profit. Machinery, by contrast, made $295.3M (¥47bn) of profit on $1.7B (¥269bn) of sales, and electric power, which the company entered in 1996, $220M (¥35bn) on $1.3B (¥203bn): two divisions with less than a fifth of sales between them produced more than six-tenths of the profit. Shutting the upstream at the Kobe works and concentrating production at Kakogawa, decided in May 2013, lowered the fixed costs of steel and swapped the source of earnings over to a shape that earns thinly in materials and thickly in machinery and power.
Competition
Not choosing merger has left it smaller in scale and wider in fields at the same time. In the 2000s, as the order of five blast-furnace makers broke up, Nippon Steel and Sumitomo Metal Industries became one as Nippon Steel & Sumitomo Metal, and Kawasaki Steel and NKK combined into JFE. Kobe Steel chose cross-shareholdings and a business alliance instead of a merger, and remains far behind the top two in crude steel scale. In place of scale it has narrowed its applications — special-steel wire rod, aluminium sheet — and secured its margins on components for the motor industry. In construction machinery, Kobelco Construction Machinery competes in the same market as Komatsu and as Hitachi Construction Machinery, which widened its earnings into mining equipment. Holding everything from materials to machinery inside one company is what carries its profit in the years when the steel cycle sinks.

Timeline

1905–1945From one works inside a trading house to an independent composite maker

  1. 1905Suzuki Shoten buys Kobayashi Seikosho and renames it Kobe Steel Works
  2. 1911Separated from Suzuki Shoten and incorporated with ¥1.4m of capital
  3. 1912Begins making drills — the first in Japan
  4. 1915Enters machinery manufacture; builds torpedo air compressors for the navy
  5. 1917Starts copper and brass production at the Moji works
  6. 1921Buys the Toba and Harima shipyards from Teikoku Kisen
  7. 1927Suzuki Shoten collapses in the financial panic; Kobe Steel survives alone
  8. 1929Harima shipyard separated; the company moves into wire rod
  9. 1933The second wire rod mill takes it past 30% of national wire rod output
  10. 1937Enters aluminium
  11. 1940First in Japan to produce welding electrodes
  12. 1942Okubo works built — later Kobelco Construction Machinery
  13. 1945Sixteen plants cut to twelve; first in the industry to tap pig iron again

1946–1975From a processor without a blast furnace to fully integrated steelmaking

  1. 1949Shares listed on the Tokyo, Osaka and Nagoya exchanges
  2. 1949Shinko Metal Products and Shinko Electric spun off in kind
  3. 1953Takasago works built as the base of the machinery division
  4. 1954Equity stake taken in Amagasaki Steel, its supplier of pig iron
  5. 1957Reclamation begins at Nadahama
  6. 1958Wins a fertiliser plant for East Pakistan — Japan’s first plant export
  7. 1959Nadahama No. 1 blast furnace blown in; integrated production begins
  8. 1961Fujisawa and Ibaraki works established
  9. 1965Amagasaki Steel absorbed, adding two blast furnaces
  10. 1969Moka works started up as the base for aluminium
  11. 1970Kakogawa works begins integrated steel production
  12. 1973The Kakogawa No. 2 furnace lifts capacity to six million tonnes
  13. 1975Fukuchiyama works built for welding consumables

1976–2001Widening the composite business, and choosing independence over merger

  1. 1978The Qatar Steel works adopts the Midrex direct-reduction process
  2. 1983Midrex of the United States acquired
  3. 1983Capital and management stake taken in Yutani Heavy Industries
  4. 1986Shinko Kobelco Construction Machinery established
  5. 1986Restructuring plan centred on unprofitable divisions announced
  6. 1988Kobe Steel USA established in New York
  7. 1989USS/KOBE begins bar and wire rod production with USX
  8. 1990Alliances with Alcoa in aluminium and Texas Instruments in semiconductors
  9. 1992Second phase of the Kobe Corporate Research Laboratories completed
  10. 1995The Great Hanshin earthquake damages both steelworks; three employees die
  11. 1998The semiconductor partner is switched from Texas Instruments to Micron
  12. 1999Mizukoshi Koshi becomes president and launches the Ten Project
  13. 1999Construction machinery unified into Kobelco Construction Machinery
  14. 2000Sale of the KMT Semiconductor stake to Micron Technology decided

2002–2025Growing a power business, and rebuilding after the quality-data falsification

  1. 2002Kobe power station Unit 1 enters commercial operation
  2. 2002Cross-shareholdings begun with Nippon Steel and Sumitomo Metal Industries
  3. 2004Kobe power station Unit 2 enters commercial operation
  4. 2008Peak of ¥2,132.4bn in sales and ¥202.4bn in operating profit
  5. 2009Net loss of ¥31.4bn after the Lehman shock
  6. 2013Kawasaki Hiroya becomes president; the Kobe furnace shutdown is set
  7. 2017The upstream at Kobe is shut and production concentrated at Kakogawa
  8. 2017Falsification of quality data in aluminium and copper disclosed
  9. 2018Net profit recovers to ¥63.2bn; Yamaguchi Mitsugi becomes president
  10. 2019Midrex signs a hydrogen direct-reduction agreement with ArcelorMittal
  11. 2020Net loss of ¥68.0bn, with ¥65.1bn of extraordinary losses
  12. 2022Midrex wins the world’s first 100% hydrogen direct-reduction plant
  13. 2024Katsukawa Yoshihiko becomes president
  14. 2025Record net profit of ¥120.1bn

Founding Story

1905–1945From one works inside a trading house to an independent composite maker

Kobe Steel spent its first six years as a single works inside a trading house, and the habits of that parent — Suzuki Shoten, which set out to supply at home whatever Japan was importing — outlived it. By the time Suzuki Shoten collapsed in the panic of 1927 the works had already added cutting tools, forgings, machinery, rolled steel and copper products, and it carried that breadth through the years of military demand and out the other side of the defeat.

A works of Suzuki Shoten, and the separation into an independent company

In September 1905 Suzuki Shoten (鈴木商店), a Kobe trading house dealing in sugar and camphor, bought the Kobayashi Seikosho (小林製鋼所) steelworks that Kobayashi Seiichiro (小林清一郎) ran at Wakinohama[1], and renamed it Kobe Steel Works[2]. The purchase was decided by Kaneko Naokichi (金子直吉), the head clerk who had taken hold of the business after the death of its proprietor Suzuki Iwajiro by installing his widow Yone as the nominal head; Suzuki Shoten went on to grow into the largest trading house in Japan during the Taisho era[3]. After the Russo-Japanese War private steel ventures were founded in quick succession, and in 1907 Japan Steel Works and the Yunishi ironworks (輸西製鉄所) were established[4]. In June 1911 the works was separated from Suzuki Shoten and incorporated as Kobe Steel Works, Ltd. with capital of ¥1.4 million[5]. As its first president it brought in Kurokawa Yuma (黒川勇熊), a rear admiral of naval construction[6]. In March 1912, the year after independence, it began making drills, stepping into domestic production of cutting tools that had until then been imported in their entirety[7].

The 1,200-tonne press installed in 1913 produced large forgings such as marine crankshafts[8], and in 1915 the company succeeded in building air compressors for torpedoes, thereafter meeting almost the whole of the navy’s demand[9]. In that same year, 1915, it entered machinery manufacture in earnest[10]; it began rolling steel in 1916, and in 1917 it started making copper and brass products at the Moji works[11]. In 1921 it bought the Toba and Harima shipyards from Teikoku Kisen, extending into shipbuilding and electrical machinery[12]. In April 1927 Suzuki Shoten, its parent, collapsed in the financial panic, but Kobe Steel survived as an independent company[13]. When the post-war reaction that followed the First World War and then the Showa Depression eroded its margins, it separated the Harima shipyard in 1929 and worked its way through by moving into wire rod and by developing rock crushers and electric shovels[14].

Widening the product range under military demand, and the rupture of defeat

In April 1933 the company completed its second wire rod mill and began producing high-grade special-steel wire rod, coming to account for more than 30 per cent of national wire rod output[15]. In 1937 it entered aluminium[16], and in 1940 it became the first in Japan to produce welding electrodes[17]. It widened its production base as well, building the Chofu works in October 1939[18] and the Okubo works in April 1942[19]. The Okubo works is what later became Kobelco Construction Machinery[20], and it remains today as the base for construction equipment. From 1937 onwards it built plants for small internal-combustion engines, artillery, shells and tanks on the reclaimed section of the Kobe works, and it also made Japan’s first steel helmets and the armour plate for tanks and guns[21]. In March 1943, after several rounds of capital increase, its capital reached ¥182.7 million[22]. Tools, forgings, wire rod, aluminium, welding consumables — the range of products kept widening as military demand expanded[23].

By the closing stage of the Pacific War the company had swollen to 22 sites at home and abroad and some 70,000 employees[24], but most of its plants had been bombed by the time of the defeat. It began rebuilding by cutting the sixteen plants it held at the end of the war down to twelve[25]; in November 1945 it was the first in the industry to tap pig iron, and it resumed wire rod production[26]. The machinery division restarted on civilian products such as castings and tobacco machinery[27]. In 1948 it moved into rationalising its equipment, and after modernising materials handling in 1949 it rebuilt its open-hearth furnaces and introduced oxygen steelmaking[28].

1946–1975From a processor without a blast furnace to fully integrated steelmaking

For its first half-century the company made steel without making iron, buying its pig iron from Amagasaki Steel while the coming of the converter rewarded integrated mills. The answer arrived on two tracts of reclaimed land — Nadahama, blown in in January 1959, and Kakogawa, integrated from March 1970 — and turned a wire rod and forging house into a full-line steelmaker with six million tonnes of capacity, while non-ferrous metals, welding and engineering grew alongside it.

Listing and spin-offs as a fresh start, and the weakness of having no blast furnace

In May 1949 the company listed its shares on the Tokyo, Osaka and Nagoya stock exchanges[29]. In August of the same year it contributed two non-ferrous alloy plants and five electrical machinery plants in kind to establish two companies, Shinko Metal Products (神鋼金属工業) and Shinko Electric[30], rebuilding the parent around its head office and the Nagoya, Okubo, Hidaka, Amagasaki, Noto and Kochi works. In November 1953 it built the Takasago works, which became the mainstay of the machinery division[31]. In June 1954 it set up Shinko Pfaudler jointly with Pfaudler of the United States[32], and in July 1955 it took an equity stake in Nippon Koshuha Steel[33]. In January 1957 it absorbed Shinko Metal Products as its alloy division[34], bringing the non-ferrous business it had once cut loose back inside the parent.

The breadth of the business had returned, but in steel the arrival of the converter had given an overwhelming advantage to the integrated producers that made everything from pig iron to finished steel within one company[35], whereas Kobe Steel had no blast furnace of its own and relied on Amagasaki Steel for its pig iron[36]. It was also the only one of the six major producers without hot rolling equipment[37]. Its equity investment in Amagasaki Steel in 1954[38] was in part an attempt to make that supply relationship secure. As long as it remained a processor of wire rod and of cast and forged steel, the growing market for sheet steel was out of reach[39].

The Nadahama blast furnace, the merger with Amagasaki Steel, and the Kakogawa works

In 1957 the company began reclaiming land at Nadahama[40]. By 1962 it had put in a total of $102.8M (¥37bn) to build a No. 1 blast furnace rated at 600 tonnes and a No. 2 rated at 1,000 tonnes[41]. The blowing-in of the Nadahama No. 1 furnace in January 1959 made it an integrated producer, making everything from iron ore to finished steel in-house[42]. It was the point reached in the fifty-fourth year from the small casting and forging works of 1905[43]. The machinery division grew in parallel: in May 1958 it won an order for a fertiliser plant for East Pakistan, closing Japan’s first export of a complete plant[44].

Even with a blast furnace, wire rod and bar alone did not make it a full-line steelmaker[45]. In April 1965 it absorbed Amagasaki Steel, which had two blast furnaces[46], widening its crude steel base. It then built a new integrated works on reclaimed land at Kakogawa, which began integrated steel production in March 1970[47]. At Kakogawa it brought plate, hot strip and cold strip facilities on stream in turn alongside the blast furnace, and the start-up of the No. 2 furnace in 1973 raised annual capacity to six million tonnes[48]. With sheet products added to wire rod and bar, the company had changed itself into a full-line steelmaker[49].

A widening network of sites, and the rise of engineering

Alongside the integration of steel, the non-ferrous and welding sites spread too: it opened a New York office in September 1960[50], and set up the Fujisawa works in March 1961 and the Ibaraki works in October of the same year[51]. In August 1969 it started up the Moka works, the mainstay of its aluminium business[52]. In July 1970, as Kakogawa came on stream, it built the Saijo works, and in September 1975 the Fukuchiyama works[53], giving it the newest plants in aluminium and copper and in welding. In June 1979 it established the Kobe Environmental Analysis Center[54], which is what later became Kobelco Research Institute[55].

From the 1970s the oil crises thinned demand for steel, and earnings stopped growing[56]. The steelmakers sought expansion outside their core business, into engineering and elsewhere[57], and by fiscal 1980 engineering accounted for more than 10 per cent of Kobe Steel’s sales[58]. When it built the Qatar Steel works in 1978, the engineering division adopted the direct-reduction ironmaking process of Midrex of the United States. As of 1974 the company was already setting out a composite business in which steel, heavy machinery and non-ferrous metals stood side by side[59], and the merits of this process — reducing iron ore with natural gas — led on to the acquisition of 1983.

Read the full history in Japanese →

Notes

  1. Kobe Steel, securities report, corporate history section↩
  2. Kobe Steel, securities report, corporate history section↩
  3. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  4. 会社銀行八十年史 (Eighty Years of Companies and Banks), Part 2, Japanese Corporate Histories, the Steel overview, Toyo Keizai Inc., 1955↩
  5. Kobe Steel, securities report, corporate history section↩
  6. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  7. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  8. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  9. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  10. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  11. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  12. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  13. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  14. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  15. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  16. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  17. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  18. Kobe Steel, securities report, corporate history section↩
  19. Kobe Steel, securities report, corporate history section↩
  20. Kobe Steel, securities report, corporate history section↩
  21. 会社銀行八十年史 (Eighty Years of Companies and Banks), Part 2, Japanese Corporate Histories, the Kobe Steel entry, Toyo Keizai Inc., 1955↩
  22. 会社銀行八十年史 (Eighty Years of Companies and Banks), Part 2, Japanese Corporate Histories, the Kobe Steel entry, Toyo Keizai Inc., 1955↩
  23. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  24. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  25. 会社銀行八十年史 (Eighty Years of Companies and Banks), Part 2, Japanese Corporate Histories, the Kobe Steel entry, Toyo Keizai Inc., 1955↩
  26. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  27. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  28. 会社銀行八十年史 (Eighty Years of Companies and Banks), Part 2, Japanese Corporate Histories, the Kobe Steel entry, Toyo Keizai Inc., 1955↩
  29. Kobe Steel, securities report, corporate history section↩
  30. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  31. Kobe Steel, securities report, corporate history section↩
  32. Kobe Steel, securities report, corporate history section↩
  33. Kobe Steel, securities report, corporate history section↩
  34. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  35. Securities Analysts Journal (証券アナリストジャーナル), vol. 2 no. 7, 1964 — An Outline of Kobe Steel: Corporate Analysis and Industry Outlook, by Minato Shizuo, managing director↩
  36. Securities Analysts Journal (証券アナリストジャーナル), vol. 2 no. 7, 1964 — An Outline of Kobe Steel: Corporate Analysis and Industry Outlook, by Minato Shizuo, managing director↩
  37. Securities Analysts Journal (証券アナリストジャーナル), vol. 2 no. 7, 1964 — An Outline of Kobe Steel: Corporate Analysis and Industry Outlook, by Minato Shizuo, managing director↩
  38. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  39. Securities Analysts Journal (証券アナリストジャーナル), vol. 2 no. 7, 1964 — An Outline of Kobe Steel: Corporate Analysis and Industry Outlook, by Minato Shizuo, managing director↩
  40. Kobe Steel, On the Fiftieth Anniversary of Establishing Integrated Steelmaking (銑鋼一貫生産体制確立50周年について), December 2009↩
  41. Securities Analysts Journal (証券アナリストジャーナル), vol. 2 no. 7, 1964 — An Outline of Kobe Steel: Corporate Analysis and Industry Outlook, by Minato Shizuo, managing director↩
  42. Kobe Steel, securities report, corporate history section↩
  43. Kobe Steel, On the Fiftieth Anniversary of Establishing Integrated Steelmaking (銑鋼一貫生産体制確立50周年について), December 2009↩
  44. A Conspectus of Japanese Corporate Histories (日本会社史総覧), Toyo Keizai Inc., 1995↩
  45. Securities Analysts Journal (証券アナリストジャーナル), vol. 2 no. 7, 1964 — An Outline of Kobe Steel: Corporate Analysis and Industry Outlook, by Minato Shizuo, managing director↩
  46. Kobe Steel, securities report, corporate history section↩
  47. Kobe Steel, securities report, corporate history section↩
  48. Securities Analysts Journal (証券アナリストジャーナル), vol. 12 no. 12, 1974 — Kobe Steel: A Composite Business of Steel, Heavy Machinery and Non-ferrous Metals, by Inoue Kozaburo, executive director↩
  49. Kobe Steel, securities report, corporate history section↩
  50. Kobe Steel, securities report, corporate history section↩
  51. Kobe Steel, securities report, corporate history section↩
  52. Kobe Steel, securities report, corporate history section↩
  53. Kobe Steel, securities report, corporate history section↩
  54. Kobe Steel, securities report, corporate history section↩
  55. Kobe Steel, securities report, corporate history section↩
  56. An Industrial History of Japan (日本産業史), vol. 3, Energy and Resources, Nihon Keizai Shimbun, 1994 — The Long Aftermath of the Oil Shock↩
  57. An Industrial History of Japan (日本産業史), vol. 3, Energy and Resources, Nihon Keizai Shimbun, 1994 — The Long Aftermath of the Oil Shock↩
  58. Securities Analysts Journal (証券アナリストジャーナル), vol. 12 no. 12, 1974 — Kobe Steel: A Composite Business of Steel, Heavy Machinery and Non-ferrous Metals, by Inoue Kozaburo, executive director↩
  59. Securities Analysts Journal (証券アナリストジャーナル), vol. 12 no. 12, 1974 — Kobe Steel: A Composite Business of Steel, Heavy Machinery and Non-ferrous Metals, by Inoue Kozaburo, executive director↩

References & sources

  1. Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Kobe Steel entry.
  2. A Conspectus of Japanese Corporate Histories, Toyo Keizai Inc. (1995).

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