NKK CORPORATION: Annual Report 2000
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Review of Operations
Other Fields

Percentage of New Sales for Fiscal 2000

Information Technology

      In Japan, revolutionary advances in information technology (IT) are being made. NK-EXA CORP., a wholly owned subsidiary, has seen its system solutions business expand significantly in recent years. In fiscal 2000, NK-EXA's sales to customers outside the NKK Group grew 6.0%, to ¥25.0 billion. NK-EXA's operations are highly diverse, encompassing consultation, design, development and maintenance. The company is currently developing more sophisticated solutions for systems used by the financial industry and enhancing its enterprise resource planning (ERP) business. NK-EXA is also focusing on training Group employees in advanced Internet technology.

      In June 2000, NKK and IBM Japan, Ltd., signed a basic agreement to form a comprehensive IT partnership. IBM Japan will purchase a 49% shareholding in NK-EXA in order to pursue collaborative operations. Our goal is to present high-quality IT services to customers in a wide range of industries including finance, manufacturing, and distribution. In addition, NKK plans to outsource all of its systems-related operations to IBM Japan to secure support required for strategically integrating IT into its operations.

      NKK itself is actively involved in dealing with IT developments. The Company is in the process of revamping its intranet, currently used by 15,000 NKK Group employees, to achieve a safer, easier and less expensive service. This "NKK Net" is the information base of its Internet business. Services will be launched in October 2000. The system will be used to form affiliations with client companies, shorten lead times through supply chain management (SCM), provide e-commerce to the steel industry, conduct joint research and development with clients, implement joint purchasing by NKK companies and offer environmental solutions. Furthermore, it will help increase the flow of information on consolidated accounts settlements and the management of capital and risk within the Group, supporting NKK's efforts to improve the efficiency and speed of Group management and fortify ties between group companies.


    IT Tie-up with IBM Japan
IT Tie-up with IBM Japan


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Urban Development

      The domestic housing market was favorable during the period owing to the government's decision to extend tax breaks on housing loans to June 2001 and to low-interest loans by the Housing Loan Corporation. The number of new condominiums on the market in the Tokyo metropolitan area hit a record annual high of 86,297 units in 1999. Supported by higher housing sales, the number of unsold homes left on the market also decreased.

      During the period, NKK focused its urban development operations on Tokyo's 23 wards and Yokohama Municipality, targeting first-time buyers with the "City Winds" condominium series. Sales in this segment slipped 0.7%, to ¥21.8 billion.

      NKK will complete construction of "ORTO YOKOHAMA," a commercial and residential complex in Shinkoyasu, Kanagawa Prefecture, by December 2000. The complex is situated on a site formerly occupied by NKK-employee family and single housing.

 

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Conceptual design of commercial and
residential complex, ORTO YOKOHAMA

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City Winds condominiums
(Nobuto, Chiba Prefecture)

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LSI

      In Japan, semiconductor demand grew rapidly during the period under review, particularly for LSIs used in mobile phones and consumer electronics. The growing importance of the Internet also boosted LSI demand worldwide. As a consequence, sales in this segment rose 9.8%, to ¥7.9 billion.

      However, NKK has come to realize that in order to meet the sophisticated needs of user industries, major investments will be required. It is for this reason that NKK has chosen to withdraw from the LSI business. This will allow the Company to focus on its core operations and more effectively utilize its capital. NKK has agreed to the sale of its LSI division to Fujitsu Ltd. NKK determined that Fujitsu would make the best use of the LSI technologies that it has acquired up to now.



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