Fiscal 1998 Plant and Equipment Investment to Reach ¥82 Billion

NKK has budgeted ¥82 billion for plant and equipment investment in fiscal 1998, which began April l. The figure is a 22% increase over the previous year but still a modest amount compared with the high-investment period of the early 1990s. There will be no significant facility construction projects this year, and the majority of capital spending will be allocated to facility refurbishment and rationalization measures to strengthen competitiveness.

Of the total (on a construction basis), ¥74 billion will be spent on the steel division and the remaining ¥8 billion on the engineering division and other areas.

Major Steel Division projects include a renovation of the 2,828m3 No.2 blast furnace (BF) at the Fukuyama Works. The ¥15 billion regular relining project began in January 1997 and was recently completed, but the start of furnace operations has been delayed. Also under way at Fukuyama is the ¥5 billion installation of new pulverized coal injection systems for the No. 2 and No. 3 BFs, due to be completed this June. The ¥4 billion ongoing project to install a new billet continuous caster at Fukuyama is slated for completion in September 1998. NKK has also set aside ¥2 billion for an ongoing project to upgrade Fukuyama's aging on-line accelerated cooling (OLAC) system on plate production lines, slated for completion in September 1998.

NKK will accommodate the total ¥95 billion required for payment during fiscal 1998 from the company's ¥87 billion depreciation charges and through other operating funds. For the next fiscal year beginning April 1, 1999, NKK's capital expenditures will likely be less than its outlay for the current fiscal year and will be spent mainly to improve older facilities.