Japan Steel Works - Company History

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Financial history 1957–2026 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded 1907
Origin 北海道炭礦汽船
Founding location 北海道室蘭
Core business at founding Manufacture of naval guns and shells
Listed 1951
President Matsuo Toshio President since 2022 (age 64, as of 2026)
Current priority Capacity investment · New product development Expanding capacity in resin machinery, and forgings for nuclear power
Founding
In November 1907 Japan Steel Works was established at Muroran in Hokkaido on joint capital from three parties: Hokkaido Colliery & Steamship and the British firms Armstrong Whitworth and Vickers. It was a joint venture formed in answer to a government that, under the Anglo-Japanese Alliance, was pressing to bring the manufacture of guns and shells onshore; cast and forged steel and gun barrels were made at Muroran, and shells at the Hiroshima works acquired in November 1920. There was one buyer, the Imperial Navy. In December 1919 the company merged Hokkaido Iron Manufacturing and ran ironmaking and mining as well. From December 1945 it turned to civilian demand, and in December 1950, under a statutory reorganisation plan, the old Japan Steel Works was dissolved and the present Japan Steel Works newly established — but no source of earnings to replace ordnance settled into place for more than a decade after the war.
The Decision
The company has kept only the forging step and swapped what comes before and after it. In December 1931 it separated ironmaking and mining into Wanishi Iron Manufacturing, moved to buying its iron from outside, and fixed the shape of a business with no blast furnace of its own. Cast and forged steel products and steel plate still made up seven-tenths of the product mix in the year to March 1961, and in 1960 the company entered injection moulding machines on technology from Ankerwerke of Germany, shifting its buyer from the Navy to capital investment by the petrochemical and motor industries. When one country after another halted its nuclear construction plans after the Great East Japan Earthquake, defects in wind power equipment and an impairment at the Muroran works brought three consecutive years of loss, and in April 2020 the materials business was transferred to JSW M&E by absorption-type company split. Materials and machinery were separated as organisations for the first time, and once the materials business had been brought into the black on its own it was returned to the parent in April 2026.
Today
The source of earnings today is not forged steel but machines that mould plastics. Of revenue of $1.7B (¥275bn) in the year to March 2026, industrial machinery accounted for $1.4B (¥226bn), 82 per cent of the total, and of operating profit of $160.6M (¥25bn) that same business produced $126.5M (¥20bn). Its origins lie in the extrusion moulding machine the company developed in-house in 1950 and the injection moulding machine it took in in 1960. The materials and engineering business at Muroran, where steelmaking and forging plant was expanded in June 2007, held a margin of 19 per cent, with operating profit of $56.3M (¥9bn) on sales of $289.6M (¥46bn). By region, China accounted for $462.8M (¥73bn), 27 per cent of revenue, so demand for resin machinery moves with Chinese capital investment.
Competition
What decides the order is the size of steel a maker can forge in a single mass. Muroran produces ingots of up to 670 tonnes, the largest in the world, and shapes them in one piece under a 14,000-tonne press without welding. As of 2010 the company could handle up to 600 tonnes where others managed 200 to 250, and components for reactors of larger generating capacity could be made nowhere else in the world. When nuclear construction stopped worldwide after the Chernobyl accident in the late 1980s many rivals withdrew, and the company that remained picked up replacement demand for components in existing reactors country by country, reaching an 80 per cent world share of primary-system components by 2005. The components go to reactor makers such as Mitsubishi Heavy Industries, and the disappearance of rivals became the barrier to entry — while from 2011 the policies of one country after another shrank the demand itself.

Timeline

1907–1945An Anglo-Japanese joint venture, and expansion under wartime control

  1. 1907Japan Steel Works incorporated on joint capital from Hokkaido Colliery & Steamship, Armstrong and Vickers
  2. 1915Head office moved to the city of Tokyo
  3. 1919Hokkaido Iron Manufacturing merged; ironmaking and mining taken in
  4. 1920Hiroshima Manufacturing acquired; Hiroshima plant established
  5. 1931Withdrawal from ironmaking; Wanishi separated into its own company
  6. 1935Groundbreaking on the Yokohama plant
  7. 1938Designated a managed plant of the Army and Navy
  8. 1941Musashi works opened at Fuchu, Tokyo, to build tanks
  9. 1945Arms production halted at the end of the war
  10. 1945Conversion to civilian production begun after the defeat

1946–1999Conversion to civilian demand, and the long fight with structural losses

  1. 1950New Japan Steel Works established in the anti-concentration reorganisation
  2. 1951Shares listed on the Tokyo and Osaka stock exchanges
  3. 1961Entry into injection moulding machines under a tie-up with Ankerwerke
  4. 1961New entry into the hydraulic excavator business
  5. 1975Machinery research laboratory opened inside the Hiroshima works
  6. 1978Japan Steel Works America, Inc. established
  7. 1982New Yokohama works plant begins operation at the Kanazawa industrial estate
  8. 1983Awarded the Deming Prize for implementation
  9. 1984A third consecutive year of net loss
  10. 1986Withdrawal from in-house manufacture of hydraulic excavators
  11. 1986Reduction of some 600 staff begun at the Muroran works
  12. 1992Site of the former Tokyo works at Fuchu sold
  13. 1992JSW Plastics Machinery (S) established in Singapore
  14. 1994A third consecutive year of net loss

2000–2020A wind-turbine failure, and the hiving off of the materials business

  1. 2000Management improvement plan announced; 420 staff cut
  2. 2006Extrusion moulding machine business taken over from Mitsubishi Heavy Industries
  3. 2007Large-scale expansion of steelmaking and forging plant begun at Muroran
  4. 2007Head office moved to Shinagawa, Tokyo
  5. 2010Meiki Co. and its group companies made subsidiaries
  6. 2012YPK and its group companies made subsidiaries
  7. 2015Net loss booked after the defect in wind turbine components
  8. 2016Impairment of $325.2M (¥35bn) on the fixed assets of the Muroran works
  9. 2017Consolidated net loss of $44.6M (¥5bn) — a third consecutive year in the red
  10. 2017Miyauchi Naotaka becomes president and representative director
  11. 2020Materials and engineering business transferred to JSW MEC by company split
  12. 2020Compressor business transferred to Burckhardt Compression Japan

Founding Story

1907–1945An Anglo-Japanese joint venture, and expansion under wartime control

Japan Steel Works spent its first four decades as the private arm of the Japanese state's armaments programme, forging gun barrels at Muroran and shells at Hiroshima for a single customer, the Imperial Navy and the Army. British capital and British gun technology built it, disarmament stripped the ironmaking out of it, and the National Mobilisation Law turned the whole of it over to war — leaving, in 1945, four works and a plant network sized for a demand that had ceased to exist.

A private arms maker born of a three-way Anglo-Japanese venture

In November 1907 Japan Steel Works was incorporated on joint capital from three parties: Hokkaido Colliery & Steamship, and the British firms Armstrong (Armstrong Whitworth) and Vickers[1][2]. It was formed at the request of a Japanese government that, under the Anglo-Japanese Alliance, was pressing to bring the manufacture of naval guns and shells onshore; with the backing of senior figures of the state including Ito Hirobumi (伊藤博文) and Matsukata Masayoshi (松方正義), the head office and the works were placed at Muroran, where Hokkaido Colliery & Steamship had its base[3]. Because the company had been founded from the outset with a national purpose in view, it developed steadily, producing chiefly ordnance for the Army and the Navy[4]. Its capital was among the largest of any private manufacturer of the day; the Japanese and the British sides held near-equal stakes, and the company began with a strongly international structure in which Japanese and British directors sat side by side on the board. Receiving technical guidance from the two British firms and from the Imperial Navy, it expanded on a footing unusual for a private arms maker, moving its head office to the city of Tokyo in 1915[5] and opening a branch in Osaka in 1918, and growing swiftly into one of pre-war Japan's foremost heavy-industry manufacturers.

In December 1919 it merged the adjoining Hokkaido Iron Manufacturing Co., taking in ironmaking and mining, and reorganised the site as the Wanishi works[6] — an integrated pig-iron-to-steel armaments complex. In November of the following year, 1920, in anticipation of the armament expansion at the Kure Naval Arsenal, it acquired Hiroshima Manufacturing Co. and set up a Hiroshima plant outside the city[7]. That Hiroshima site, later the main works for resin machinery, began life as a plant making shells for the Navy[8]. The Anglo-Japanese Alliance and the Imperial Navy's arms build-up thus settled the geography of Japan Steel Works. Little more than a decade after its founding, the two-pole structure of a cast-and-forged-steel base at Muroran and a shell base at Hiroshima had taken shape; even through the slump that followed the First World War the company grew its order book on the back of the Navy's fleet expansion programmes, and by around 1930 it held a place among the core firms supporting the pre-war state armaments industry.

Leaving iron under disarmament, and total conversion to war production

When demand for armaments fell away with the disarmament of around 1930, the ironmaking plant at Wanishi was separated in 1931 into a company of its own[9], later passing to Japan Iron & Steel (now Nippon Steel) and becoming its Muroran works. Japan Steel Works withdrew from ironmaking and narrowed its business to three fields — cast and forged steel materials, ordnance, and industrial machinery[10] — and this letting go of steelmaking under disarmament became the point from which it took a road entirely different from that of the big steelmakers after the war. The geography at Muroran today, where Nippon Steel's blast furnaces stand on land adjoining Japan Steel Works' cast and forged steel shops, derives directly from that 1931 separation, which in fact sharpened rather than softened the company's character as an arms maker. Freed from ironmaking, the Muroran works turned wholly to military demand thereafter as a dedicated base for gun barrels and for cast and forged steel materials for warships, and the industrial machinery business was treated as a derivative of gun metal and military castings. In the age of the big-gun battleship it had become the largest and most advanced private arms company in the country, as the huge 10,000-tonne press at the Muroran works showed[11].

In November 1935 it broke ground on a Yokohama plant at Kanazawa-machi in Kanagawa Prefecture, completing it in June 1936 and beginning operation[12], and in 1941 it brought the Musashi works at Fuchu, Tokyo (later the Tokyo works) into service to mass-produce tanks for the Army[13]. In September 1938, under the National Mobilisation Law, it was designated a managed plant of the Army and Navy, and turned wholly to munitions production on a division of roles — gun barrels at Muroran, shells of every kind at Hiroshima, tanks at Musashi. Business grew under wartime control, and the company swelled into a large enterprise binding together four works and the network of subcontracting plants beneath them, coming to carry a core part of the state's prosecution of the war as a key plant designated by the Ministry of Munitions. Its products covered almost the whole range of necessities for heavy and chemical industry — axles for wheels, ships' fittings and electrical goods through to steel, chemicals and machinery of every kind[14]. The surplus plant and labour piled up in this wartime expansion weighed heavily on the conversion to civilian demand after the war, and were a distant cause of the long workforce reductions and structural reform that ran on from the 1980s.

1946–1999Conversion to civilian demand, and the long fight with structural losses

Stripped of its only customer, the company spent fifteen years looking for a replacement and found two of them in a single year, 1961: injection moulding machines licensed from Germany, and hydraulic excavators. One became the business it still lives on and the other was abandoned within twenty-five years, while the Muroran materials works it had inherited from the war went on losing money throughout. Sales grew from $26.9M (¥10bn) in the year ended March 1957 to $1.2B (¥136bn) by March 1999, but the decade closed on a third consecutive year of net loss and another round of cuts.

Entering an entirely new business: the injection moulding machine

With the defeat in 1945 arms production stopped, and the company began again, taking permission works by works, in turn, to convert production to civilian goods[15]. Under a statutory reorganisation plan drawn up on the basis of the Act for the Elimination of Excessive Concentration of Economic Power, the old Japan Steel Works was dissolved in December 1950 and renamed Old Japan Steel Works Co., Ltd., and a new Japan Steel Works, Ltd. was established in its place[16]; in June the following year, 1951, its shares were listed on both the Tokyo and Osaka stock exchanges[17]. Yet no earnings pillar to replace pre-war ordnance and materials settled easily into place. In 1954 the company carried out a rationalisation of some 150 staff in an attempt to rebuild, and for close to a decade it went on searching for a shape as a civilian manufacturer combining cast and forged steel materials, industrial machinery of various kinds for the petrochemical industry, and pressure vessels for chemical plants; the dozen-odd post-war years were a period of trial and error without a sense of direction.

The turning point came in 1961. The company entered the plastics injection moulding machine business under a technical tie-up with Ankerwerke of Germany[18], and in the same year newly entered the hydraulic excavator business[19]. These two became the centre of its post-war new ventures, and a fresh division of roles was defined — injection moulding machines at the Hiroshima works, materials, ordnance and cast and forged steel at Muroran, chemical machinery at Yokohama. In January 1975 it opened a machinery research laboratory (now the Advanced Technology Research Laboratories) inside the Hiroshima works[20], strengthening the development of injection moulding machines on an organised basis. Hiroshima remade its contents from a pre-war shell plant into a post-war resin machinery base; in August 1978 the company established Japan Steel Works America, Inc.[21], and together with the founding of JSW Plastics Machinery Service in December 1975 and the groundbreaking of a new plant at the Yokohama works in December 1981, it set about building sales and service networks at home and abroad and reinforcing its production capacity for chemical machinery.

Quitting hydraulic excavators, and repeated workforce cuts

Of the two businesses newly entered, hydraulic excavators lost the competition with Komatsu and Hitachi Construction Machinery. In September 1982 the company cut output by some 30 per cent, in March 1983 concluded a production and sales tie-up with IHI, and in March 1986 decided to withdraw entirely from in-house manufacture. Already in the year ended March 1984 it had fallen into a third consecutive year of net loss[22]. In July 1986 it began a reduction of some 600 staff at the Muroran works, and in May 1998 cut a further 300, reaching 900 in all[23]. Dismantling the materials and ordnance capacity swollen by wartime control ran on as a long workforce adjustment lasting close to twenty years from the 1980s; at the Muroran works over the same period the consolidation of cast and forged steel production lines and the disposal of idle plant went forward in parallel, and through long consultation with the labour union the phased rationalisation at last came to a break — a period in which the company made its shift away from pre-war-style heavy-goods heavy industry, and made it painfully.

In March 1992 it sold the site of the former Tokyo works at Fuchu, Tokyo, booking a $335.5M (¥43bn) gain on the disposal of fixed assets[24]. The site was redeveloped as Fuchu Intelligent Park[25]. Even so, the year ended March 1994 again brought a third consecutive year of net loss[26], and in April 2000 the company announced a management improvement plan and pressed ahead with a reduction of 420 staff[27]. Across that decade the global rollout of injection moulding machines advanced — Singapore in July 1992[28], Malaysia in July 1996, Thailand in September 1996, Hong Kong in April 1997, Shenzhen in China in May 2002, Shanghai in July 2008, Ningbo in December 2010 — spreading sales and service bases across Asia in particular. On the other side, the constitution in which the structurally unprofitable materials business dragged on the consolidated accounts did not change: an earnings structure took hold in which the profit earned abroad by resin machinery was offset, as it came, by the losses of the Muroran works, and it remained a constraint on management over a long period.

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Notes

  1. Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968↩
  2. Japan Steel Works, annual securities report, corporate history section↩
  3. Japan Steel Works, annual securities report, corporate history section↩
  4. Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968↩
  5. Japan Steel Works, annual securities report, corporate history section↩
  6. Japan Steel Works, annual securities report, corporate history section↩
  7. Japan Steel Works, annual securities report, corporate history section↩
  8. Japan Steel Works company-history materials, Fifty Years from the Founding, volume 1, 1968↩
  9. Japan Steel Works company-history materials, Fifty Years from the Founding, volume 1, 1968↩
  10. Japan Steel Works, annual securities report, corporate history section↩
  11. Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968↩
  12. Japan Steel Works, annual securities report, corporate history section↩
  13. Japan Steel Works, annual securities report, key management indicators section↩
  14. Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968↩
  15. Japan Steel Works, annual securities report, corporate history section↩
  16. Japan Steel Works, annual securities report, corporate history section↩
  17. Japan Steel Works, annual securities report, corporate history section↩
  18. Japan Steel Works, annual securities report, corporate history section↩
  19. Japan Steel Works, annual securities report, corporate history section↩
  20. Japan Steel Works, annual securities report, corporate history section↩
  21. Japan Steel Works, annual securities report, corporate history section↩
  22. Japan Steel Works, annual securities report, corporate history section↩
  23. Japan Steel Works, annual securities report↩
  24. Japan Steel Works, annual securities report↩
  25. Japan Steel Works, annual securities report↩
  26. Japan Steel Works, annual securities report↩
  27. Japan Steel Works, annual securities report↩
  28. Japan Steel Works, annual securities report, corporate history section↩

References & sources

  1. Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Japan Steel Works entry.
  2. The Japan Steel Works, Ltd. (annual securities reports), including the corporate-history section, and the company's disclosures on the 2020 absorption-type company split and the 2026 reintegration of Japan Steel Works M&E.

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