• [North America] Demand for steel rebar in the US in 2024 rose to 8.78 million tonnes (+5.8% year-over-year). We expect further strong demand due to ongoing infrastructure investment and population growth, with demand rising to 9.43 million tonnes in 2028. Canadian demand for construction steel in 2024 rose to 1.45 million tonnes (+2.7% year-over-year). We expect moderate growth thanks to ongoing population growth, with this expected to reach 1.98 million tonnes in 2028. As a result of reciprocal tariffs with the US, the risk of downward price pressure from imported materials has been suppressed in our US locations. Although we thus expect increased profits from price increases, we are also concerned that the cost of investment in such facilities, which are imported from Europe, will increase, with large-scale investments in facilities lying ahead. While there may be some impact on steel exports to the US at our Canadian locations, there will also be the benefit of steel imports from the US being limited due to Canada’s reciprocal tariffs, so we expect the total effects to cancel each other out.
• [Vietnam] Construction demand in 2024 recovered from the real estate recession that had continued into the previous year, rising slightly to 10.2 million tonnes (+1.7% year-over-year). We expect demand to bounce back, particularly in the north-central region, thanks to demand stimulated by large-scale public investments from 2025 onward. We are thus forecasting that demand will grow to its previous level of around 11 million tonnes.
       As our Vietnamese locations do not export steel to the US, there will be no direct effects from American reciprocal tariffs. There are, however, concerns that Vietnamese and Chinese steel exports to the US will be restricted, and that this will spill over into the Vietnamese steel market, as well as concerns over potential stagnation in the Vietnamese economy overall, as it has a high volume of exports to the US.

In 1963, we were the first steel manufacturer using EAFs to expand overseas. Since then, we have done business in more than 20 countries, whether through building plants, providing technical guidance, or launching projects. We currently have three companies in Vietnam and two in North America. We expanded into Vietnam in 1994 shortly after the Doi Moi economic reforms were initiated, and in addition to helping rebuild the country following the Vietnam War, we have earned a reputation of providing high-quality, Japanese products. We continue to boost local employment and improve the level of technology by doing business firmly rooted in local communities.

[Strengths]

• More than 50 years of history and results in doing business overseas
• Capability to diversify risks by having bases in both growth markets (Vietnam) and mature markets (US, Canada)
• Abundant opportunities to develop Group employees, through providing technical guidance and equipment investment locally

[Opportunities]

• Demand is expected to increase in both Vietnam and North America
• We will seek to improve our steelmaking business using EAFs’ position due to demands for carbon-neutral circular economies on a global scale
• There are few manufacturers in North America capable of producing fine rebar, which is a specialty of the Group

[Risks and challenges]

• Stricter competition as other companies in the same industry enhance capabilities in expectation of increased demand for steel as the Vietnamese economy grows
• Reaching carbon neutrality (increasingly stricter government environmental regulations)
• Difficulties reaching stable profitability due to factors such as dynamic market conditions and operational issues
• Plant equipment aging, safety measures

Following its second re-entry into the US in 2016, establishing a global tripolar structure consisting of Japan, Vietnam, and North America has been a major strategy for the Company. However, in light of the changing political and economic conditions in each region, the Company will shift the weight of its investment strategy to emphasize North America. The framework of the existing global tripolar structure will remain unchanged, but we will invest in growth with an emphasis on North America, while in Vietnam, we will place greater focus on the northern part of the country.

Under NeXuS II 2026, we recognize that the rebuilding our global tripolar structure is a top priority, and have decided to shift our investment strategy from the Vietnam business, where we have already made a set of large-scale investments, to our business in North America.
     With regard to our operations in North America, Vinton Steel LLC will build a new steelmaking plant and partially remodel its steel rolling mill facilities to address facility aging, aiming to improve and stabilize profits by significantly reducing costs through improved productivity and by increasing production and shipment volumes. These capital investments are planned at $255 million, with operations to begin in 2027. In addition, AltaSteel Inc. is also working to build up its rolling facilities and begin commercial production of 10mm rebar, with commercial production beginning in spring of 2024.

     With regard to our business in Vietnam, Vina Kyoei Steel Co., Ltd. will strive to improve its financial structure while minimizing the impact on consolidated financial results so that it can operate stably in response to changes in market conditions. Vietnam Italy Steel JSC (VIS) will aim to develop a corporate structure that can generate stable profits through the vertical start-up of a new rolling line. VIS will also strengthen cooperation with Kyoei Steel Vietnam Co., Ltd. (KSVC), a rolling mill company, to create an optimal production system for the two companies in northern Vietnam. We will develop VIS and KSVC into companies that play central roles in our operations in the country. 

After the fire at our US location, operations remained poor. Meanwhile, despite a weak market resulting in losses, we dispatched engineers to perform equipment and operations diagnostics, achieving cost reductions.
     Our Canadian location successfully began commercial production of 10mm rebar, contributing a major increase in profits in FY2025. The extension of the shipping yard was completed in May 2025, with future sales expansion measures proceeding as planned.
     The competitive environment in Vietnam has remained challenging, but demand is on the way to recovery, with losses being gradually contained from their bottom in FY2024. A new rolling line was completed at the VIS Hai Phong plant in June 2025. Shipping costs to the Hung Yen rolling mill were a challenge for VIS. However, with the new rolling line going into operation, VIS aims to secure greater cost competitiveness due to reduced shipping costs, and, further, to achieve even greater profits by increasing annual production volume by 500,000 tonnes to 800,000 tonnes.