Shutting the upstream at Kobe and consolidating ironmaking at Kakogawa (2013)
Four and a half years of building in order to close
The decision to stop a blast furnace could not be executed on the day it was made. Four and a half years passed between the resolution of May 2013 and the actual banking of the fire because other things had to come first: some ¥65.5 billion of work at Kakogawa — a sixth continuous casting shop, twice the blooming-mill reheating capacity, added degassing and refining furnaces — and the time needed to re-obtain quality approvals from the automakers. And the company raised part of the money from the market, in a $851.4M (¥83bn) public offering in fiscal 2013. The decision to fold up appeared first as an investment.
Yet the ¥15 billion a year the consolidation delivered was not enough to bring a production cost of a little over ¥80,000 a tonne down to JFE Steel’s ¥65,000. The scale disadvantage that president Kawasaki Hiroya described as leaving the company liable to “be wiped out” survived the move to a single site. By 2024 even the two furnaces kept at Kakogawa were under study for reduction to one blast furnace and one electric furnace. The line of furnaces lit at Nadahama in 1959 did not come to rest with the 2017 consolidation; it remains in the middle of a contraction.
Revenue and net margin, FY2008–FY2018
Revenue in ¥ bn (bars) and net margin in % (line), for the years around the decision. Shaded columns are FY2013 onwards — after it was taken.
Source: securities reports
Read the full dossier in Japanese →
The Japanese edition carries the complete record of this decision — the situation that forced it, the options weighed, what actually followed, and the sources behind every claim.
Other key decisions at Kobe Steel
- 1965 Nadahama, Amagasaki Steel and the Kakogawa works (1965)
- 1983 Buying Midrex and its natural-gas direct-reduction process (1983)
- 1996 Entering wholesale power: a coal-fired station inside the steelworks (1996)
- 2000 The Texas Instruments DRAM venture, and selling out to Micron (2000)
- 2002 Cross-shareholdings with Nippon Steel and Sumitomo Metal — and their unwinding 23 years later (2002)
- 2017 Disclosing the quality-data falsification, and the management overhaul (2017)
Yen amounts are converted at the average rate of each figure’s own year — not today’s rate; the revenue chart is shown in yen. Exchange rates & sources — the full ¥/US$ table →
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