Through the resource-recycling business, we contribute to the realization of a sustainable society.
 

Yasuyuki Hirotomi, President

 

Through the resource-recycling business, we contribute to the realization of a sustainable society.

 

Yasuyuki Hirotomi, President

Our business model contributing to the building of an advanced recycling-oriented society

We are an ordinary steel minimill company, engaged in the production of steel products from steel scrap using electric arc furnaces. While boasting the largest market share in Japan with deformed bar for construction and civil engineering, we have also expanded our businesses overseas. We also conduct material recycling business by utilizing the electric furnace-operating technology that we have cultivated over many years. The steelmaking industry roughly comprises two types of producers: integrated steel producers and steel minimill companies. Integrated steel producers make steel by feeding iron ore in blast furnaces. In a nutshell, steelmaking by minimills involves the recycling of steel resources. It is said that Japan has approximately 1.4 billion tons of steel accumulated in various forms, including buildings, railway bridges and automobiles. Around 2% of that, or approximately 30 million tons, is collected as steel scrap every year. Steel is a highly recyclable material, which can be “reborn” again and again after it reaches the end of its life as a product. We take pride in playing a role in building an advanced recycling-oriented society by melting these steel scrap in electric arc furnaces and sending them back to society as steel products. It can be said that our business as a whole, including the material recycling business which completely detoxifies waste by taking advantage of the characteristics of ultra-high-temperature electric furnaces, contributes to the building of a recycling-oriented society.

Medium-Term Business Plan, aimed at quality enhancement for the future, is steadily progressing

In October 2018, we formulated the “Quality Up 2020” medium-term business plan with the slogan “taking on new challenges to further strengthen the Kyoei Steel Group.” While the plan sets quantitative targets of 280 billion yen for consolidated sales and 14 billion yen for ordinary income for fiscal year ended March 31, 2021 (fiscal 2021), we gained profit to exceed the target in fiscal year ending March 31, 2020 (fiscal 2020). The business strategy under the plan is the establishment of a tri-polar global system. The three key regions of Japan, Vietnam and the United States form a robust group structure while complementing each other. The domestic steel business showed stable performance in fiscal 2020. However, to maintain a comparative advantage in Japan in view of the likely slowdown in demand for infrastructure after the Tokyo Olympic Games and due to the future decline in population, we are working to reduce production costs through such initiatives as establishing efficient production systems and improving operation technology. The overseas steel business, on a shipment volume basis, has grown to about the same level as the domestic steel business. While demand for steel products has been steadily growing in all three regions of Japan, Vietnam and the United States, price competition has been intensifying in northern Vietnam. We have therefore positioned the enhancement of profitability as the most important issue and are making efforts to tackle this issue. The material recycling business is faced with growing social demand in line with the diversification of industrial waste in recent years. In response to this demand, we are implementing various initiatives. The Medium-Term Business Plan sets enhancement of the capabilities of work practices, people and management as three Quality Up goals. I often say to our employees, “let’s make our company a first-class company” as our long-term vision. Expanding profits and the company scale are not the only things needed to lead to a “first-class” company. In order to grow as a company that is valued in all aspects, including human resources, governance, quality, management and executive capabilities, as well as environmental management, we are committed to quality enhancement. Underlying this vision is our management principle, “Spirit of Challenge.” While continually taking on challenges for further growth, we aim at the goal of becoming a company that is trusted and valued by society, customers and stakeholders.

Further efforts to address ESG issues

As part of our quality enhancement initiatives under the Medium-Term Business Plan, we are working to reinforce corporate governance, , and also striving to achieve the targets of placing priority on compliance and building a stronger quality management framework. By setting up compliance-related committees, such as the Risk and Compliance Committee and the Central Quality Management Committee, we have established a system to ensure strict compliance with laws and rules. We have also been promoting workstyle reform with the aim of providing a more comfortable working environment and greater motivation for work. For example, steel minimill companies customarily operate their plants mainly on weekends and at night, when electricity prices are low. But in recent years, in line with the expansion of renewable energy, such as solar power generation, utilization of ample surplus energy during weekday daytimes has been increasingly promoted. In response to this trend, Kanto Steel, our Group company, has substantially reduced its work and operation hours on holidays and at night. Also on shop floors, to increase women’s participation, the company has set up new restrooms and shower rooms for women. By improving welfare facilities, the company is committed to creating an environment where diverse human resources can play active roles. In the aspect of the environment, we have been making Group-wide efforts to reduce energy consumption so as to reduce CO2 emissions of the Group. I believe that we, as a company engaged in resource recycling, should force ourselves to aim at high goals. In the steel-making processes, slag and other byproducts are generated besides steel. We reuse the slag as a roadbed material. We will make continuous efforts to realize a way of manufacturing that makes efficient use of limited resources with minimum impact on the environment.

"Taking on challenges toward the future" - Our founding spirit inherited down to the present day

Koichi Takashima, essentially our founder, heartbroken at the devastation of Japan after the war, devoted himself to the steel business with a strong determination to remind people around the world of Japan’s magnificence, and made the company one of the first Japanese steel minimill companies to expand into the overseas market. His decision to expand the business into Vietnam also stemmed from his desire to help the country restructure its infrastructure, which had been devastated by the Vietnam War. Our management principle “Spirit of Challenge” represents this original desire of the founder. The founding spirit, which focuses not on how to make money but on “contributing to society and building infrastructure across the world through steelmaking,” has been inherited down to the present day. The theme of the Medium-Term Business Plan “Taking on challenges toward the future” also expresses the aspirations of Koichi Takashima. In the 1970s, when pollution became a serious problem in Japan, Koichi was saddened by the fact that manufacturing, in which he had been proudly engaged, was adversely affecting the environment. He thought, “we must stop relying on the generosity of the earth but instead create a sustainable society. We should use technologies, which have produced economic growth, to achieve co-existence with the global environment, nature and regional communities.” This will be achieved by “taking on challenges toward the future.” The Sustainable Development Goals (SDGs), adopted recently by the United Nations, question how a company should balance its sustainable development and contribution to society. This question is consistent with our desire to contribute to society through the recycling of steel resources. With a view to how we can contribute toward the establishment of a resource recycling-oriented society, we will continue to take on challenges.

As a company trusted by society

The contents of this website of Sustainability provide details of the Company’s history, initiatives taken, and determination to contribute to the realization of a sustainable society. And I hope that the roadmap for identifying our materiality will provide employees with an opportunity to think about the environmental issues. I would like to ask all our stakeholders to take a look at the contents and give us your honest opinions.