Entering wide hot strip — a blast-furnace monopoly product (1991)

A company that can stay independent only by adding products

Seventy billion yen was, at Tokyo Steel’s profit level of the time, close to a single period’s earnings. Behind the decision to direct it at flat products without borrowing lay a reading that standing first in H-beams did not in itself mean safety. Once the major blast-furnace makers had finished bringing the electric-arc producers into their groups, the only way to remain independent was to move into the other side’s core products — the scenario Iketani Masanari had been nursing for five years was consistent on this point. The moment when thin-slab continuous casting was set aside on the engineers’ advice is, within that scenario, an exceptionally cautious choice.

The timing of entry, however, coincided with the trough of the market. Losses ran for five periods from the year after hot coil mass production was achieved, and the Mie plant, for which land had been bought, was never built. Investment that widens the product range becomes an expansion of capacity if demand is growing, and leaves only the weight of depreciation if demand contracts. The flat products of 1991, having experienced both in turn, remain as the first line of a lineage that runs on to the Tahara works of 2009 and the low-carbon steel of 2024.