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News Release

JFE Holdings, Inc.

New Year’s Message for 2014
Hajime Bada, President and CEO, JFE Holdings, Inc.

Hajime Bada

Hajime Bada
President and CEO

Happy New Year and greetings at the start of 2014!

Last year, the Bank of Japan implemented a bold monetary-easing policy and took measures to correct the yen’s over-appreciation, finally bringing the end of deflation into view. The JFE Group’s financial performance took a favorable turn this fiscal year, thanks to improved conditions in the Japanese economy, as well as the hard work of employees in our operating companies and their subsidiaries. Beyond Japan, however, the global economic outlook remains uncertain, although there are encouraging signs in some markets. In this environment, JFE must continue to address a wide range of challenges, tackling them one by one to enable the Group to move forward vigorously.

Key Initiatives

Our top priority last year was to improve profitability in existing businesses under our fourth medium-term business plan. Efforts are beginning to bear fruit in our operating companies, indicating that we are on the right track. But we need to work even harder to maintain the momentum, which should help to enhance the evaluation of our company and possibly lead to a higher share price and a better credit rating, as well as profit sharing with employees. Solid profitability is the only way we can expand in growth markets and improve our financial standing.

Key Challenges

There are five key challenges that we must address this year.

The first is improved profitability in existing businesses, which remains the top priority of our ongoing medium-term business plan. It is critically important that the Group should have a strong earning capability under any economic condition. This will require us to maintain highly stable production, quality and costs; strengthen competitiveness; improve responsiveness to customer needs; optimize supply chains; and steadily achieve returns on the projects in which we have invested, both in Japan and overseas.

The second challenge is to develop products and services that further satisfy the needs of customers and society, and to develop more cost-competitive process technologies in accordance with our corporate vision. In return, customers would rate our technologies as the best and the most innovative, thereby making the JFE brand more visible and trusted.

The next challenge is to develop initiatives for sustainable growth. We need to grow within each operating company’s fields of specialty by expanding our production and sales bases, and by collaborating with new partners in growth markets, such as Southeast Asia. I am talking about initiatives in Asia such as JFE Steel’s construction of continuous galvanizing lines for automotive steel sheets, JFE Shoji Trade’s establishment of a steel processing center and JFE Engineering’s incorporation of J&M Steel Solutions, an infrastructure construction company in Myanmar.

The fourth challenge is to invest in our future while maintaining and strengthening our financial health. We must allocate limited corporate resources with maximum efficiency and invest in profitable businesses and facilities in a timely and strategic manner.

Our final challenge is to nurture human resources. As we expand overseas, we will increasingly need employees who can play active roles in different cultures with different values. Each operating company must assign young employees to positions overseas to better cope with business environments that will likely become more globalized. With many experienced workers reaching the retirement age in the past few years, our operating companies have been facing rapid generational turnovers. It is crucial to quantify and visualize the know-how and skills of each individual, as well as to strengthen training by leveraging the help of retirees to steadily and efficiently pass expertise and skills to younger workers.

My Expectations

The environment we face is undergoing significant changes. To continue to gain the respect of our customers, we must listen more carefully to their needs and then respond promptly. To that end, each employee must understand their roles, have the will and ability to think by themselves, and then act. To materialize our corporate vision, we need to act with pioneer-like energy, flexibility uninhibited by the past, and sincerity.

In closing

Thoroughly meeting our social responsibilities is fundamental to our way of business, so please help us fulfill these obligations and thereby earn the increased trust of our stakeholders, including customers, shareholders, businesses and communities.

These are my thoughts in the dawn of our new year. Very best wishes to you and your family for a prosperous 2014!