NKK CORPORATION: Annual Report 2001
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REVIEW OF OPERATIONS

     
   
Other Fields

   
     



Information Technology

In fiscal 2001, demand for IT remained brisk. A noticeable trend--the polarization of business--became apparent, with enterprise resource management, supply chain management, knowledge management and other new branches of IT acquiring higher importance, and conventional development projects assuming lesser significance. In all industries where companies are scrambling to restructure, there is increasing demand for comprehensive solutions that untangle intricate webs of information-related problems. 

      NK-EXA Corp., our IT subsidiary, capitalized on prevailing opportunities to boost sales 1.6%, to ¥38.6 billion. Good results from the business systems and computer graphics segments offset a lackluster performance by the engineering systems segment. 

      In June 2000, NKK entered into an agreement with IBM Japan, Ltd., that is designed to strengthen the IT businesses of both companies. Joint efforts toward this goal began in September 2000. The agreement, which parallels the objective in NKK's medium-term group business plan, will sharpen the Group's competitive edge and reinforce its business foundation through the strategic use of IT. Concurrently, we will strive to apply accumulated technologies to broaden our lineup of information services.

      The NKK Group is also working to foster closer ties with client companies using NKK-SPEED, a system that provides information on steel transactions. We also seek to maximize the benefits of the corporate intranet; further develop our Internet business to shorten lead times through supply chain management; promote e-commerce in the steel industry; facilitate joint R&D with clients; expedite joint procurement activities within the Group; and extend environmental solutions to clients.

IT Tie-up with IBM Japan



Urban Development

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City Winds condominiums in Komagome, Tokyo
   

Sales of condominiums in the domestic market remained steady in fiscal 2001, thanks to low interest rates from the Housing Loan Corp. and tax breaks on home purchases. The number of condominiums available for sale reached an all-time high. Under these favorable conditions, NKK aggressively developed and marketed condominiums and was rewarded with dramatic improvement in sales volume, to a record 700 units. Sales skyrocketed 115.1%, to ¥47.0 billion.

      To raise income efficiency, we focused on short-term development projects, where the tighter time frame from land purchase to building or unit sale allows us to realize a return on our investment sooner. At the same time, we upheld high quality standards with the implementation of a system through which our experienced technical staff monitor all project stages, from design to construction.

      NKK recently completed Orto Yokohama, the first large-scale urban redevelopment project in the Corporation's plan to effectively utilize industrial and residential lands, including company-owned property in the Keihin (Tokyo metropolitan) area. Orto Yokohama opened in January 2001 with an occupancy rate of 100%. Boasting total floor space of about 123,000 square meters, this advanced urban complex cost more than ¥60 billion, including land value, to build. The success of such a colossal architectural undertaking will certainly spur new urban redevelopment projects along the Keihin coastline. We are confident this achievement will elicit further expansion of our urban development business.


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Advanced commercial and residential urban complex, Orto Yokohama



LSI

We had been exploring large-scale integrated circuit (LSI) design and development operations as a future area of diversification. However, in view of the sizeable and ongoing investment required to stay competitive in this business, the Corporation decided to withdraw completely from the electronic devices business and sold operations to Fujitsu Limited in June 2000.


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