New commercial and residential complex, Orto Yokohama

In fiscal 2002, sales of condominiums in the Tokyo metropolitan area shifted into high gear, topping 80,000 units for the third consecutive year, as low interest rates and tax breaks on home purchases continued to encourage potential homeowners to purchase property. NKK completed seven condominium blocks and sold 624 new units.

      Based on the urban redevelopment projects being undertaken by makers, NKK concentrated on the provision of distinctive products geared to the diversified needs of clients. The Corporation was able to trim expenses by reducing the period from land purchase to building or unit sale.

	Broad Court condominiums in Ikegami, Tokyo

      Demand for condominiums in the Tokyo metropolitan area is expected to remain high in fiscal 2003, settling at around 82,000 units. Capitalizing on available opportunities, NKK aims to sell about 750 units.

      In the realm of large-scale redevelopment projects built on corporate landholdings, we moved forward on our second major undertaking—a project highlighting the old Asano dockyards. Our first effort was Orto Yokohama, an advanced urban complex that opened in January 2001. The basic building plans of our second effort have already been drawn and we have entered the actual design phase. The project should break ground in fiscal 2003 with the rezoning of land for the various components of the complex.

The recycling environment is characterized by greater awareness of global environmental protection and resource conservation as well as concern over fewer sites for final waste disposal. Against this backdrop, Japan has implemented legislation aimed at reducing the amount of specific waste materials through recycling. In April 2000, the government rounded out the Containers and Packaging Recycling Law, for which earlier legislation targeted only some waste plastics, and in April 2001, the government enacted the Electrical Appliances Recycling Law. We envision a much larger market for recycled waste as other materials, such as construction waste and scrapped cars, are added under the label of materials legally approved for recycling.

      We have derived synergies through the steelmaking expertise of the Steel Division and the environmental recycling technologies of the Engineering Division to facilitate low-cost, high-volume recycling of used waste plastics. NKK blazed a trail through the industry in October 1996 with the first application of waste plastics as reducing agents for blast furnaces. Currently, the Corporation’s recycling capacity stands at 170,000 tons—the highest level in Japan.

      Later, the Corporation expanded its recycling targets to include used household appliances, spent fluorescent lights, dead batteries and waste polyethylene terephthalate (PET) bottles. This far-reaching aspect of our recycling activities has earned us universal appreciation and paved the way for solid achievements, most notably a high zero-emission status.

      During fiscal 2002, the prevailing Containers and Packaging Recycling Law encouraged more regional governments to implement separated disposal of garbage. This trend in turn buoyed requests for blast furnaces that use waste plastics as reducing agents. Services related to the recycling of household appliances also found market favor, as did new businesses, including a project to provide a system for the compaction of waste plastics, commissioned by regional governments that have adopted the Private Finance Initiative (PFI).

      In fiscal 2003, we expect additional orders from regional governments for blast furnaces using waste plastics as reducing agents. We will continue to venture into new fields and utilize the synergies afforded by existing operations to promote general recycling businesses. We are confident our efforts will translate into higher profits.