| July 1, 1999 |
Fiscal 1999 Plant and Equipment Investment to Decline to ¥46 BillionNKK has budgeted ¥46 billion for plant and equipment investment in fiscal 1999, which began April 1. The figure represents a 46% reduction from the previous year and is significantly below the high-investment levels reached in the early 1990s. Capital spending has been scaled down due mainly to the completion of recent major facility refurbishment projects at Fukuyama and as a result of the company's ongoing restructuring efforts to cut fixed costs amid Japan's recession and subsequent sluggish steel demand. Of the total ¥46 billion (on a construction basis), ¥36 billion will be spent on the steel division and the remaining ¥10 billion on engineering and other areas. In the Steel Division, 60% of the spending will be allocated to replacing and improving aging facilities, 25% to implementing manpower savings and rationalizing measures, and the remaining 15% to energy-saving, environmental protection and other investments. Actual payment for capital expenditures during fiscal 1999 will total ¥47 billion, down 47% from the year before. NKK intends to fund the entire payment from the company's ¥76 billion depreciation charge. For the next fiscal year beginning April 1, 2000, NKK's capital spending will likely be restricted to the same modest level as the current year in the absence of any newly planned projects. |
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