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Business

Japan steel giant eyes overseas expansion

Masami Mori, middle, a production manager at Nippon Steel & Sumikin Galvanizing (Thailand) in Rayong Province, Thailand, teaches local engineers

TOKYO -- Nippon Steel & Sumitomo Metal has been setting up more facilities overseas since being created in October 2012.

     "Workers here are more eager than Japan's young engineers to improve work efficiency, they just need more experience," said Masami Mori, production manager at Nippon Steel & Sumikin Galvanizing (Thailand). The facility, in Rayong Province produces zinc-coated steel sheet.

     Mori, 63, was sent to Thailand two years ago, a little before commercial production began in autumn 2013. He was tasked with training some 30 local engineers in plant operations. This month the plant began shipping sophisticated steel plates used in cars.

     Mori is a galvanization expert with more than 40 years of experience. He built up his career on a zinc-plating line in the company's Nagoya steelworks, and had never worked overseas until two years ago. Now he lives in a Rayong hotel alone, while his family stay in Japan.

      The steelmaker last August opened a production base in Mexico. Plans are also underway to open a facility in India and build a new factory in China by 2015. The facilities aim to supply global automakers and boost global output capacities.

New challenges     

     The steelmaker is setting up overseas facilities through its domestic bases, which are then responsible for managing the production facilities. Management responsibilities for the new sites include posting workers and training local engineers. The Nagoya steelworks is in charge of the Thai operation.

     One drawback is that the company is short of personnel capable of training people overseas. The Nagoya site, under the control of Nippon Steel before the merger, has less engineers than 20 years ago when the factory started producing automobile steel for overseas markets.

     Manpower shortages have become more serious as Nagoya runs at full capacity to satisfy domestic demand among automakers. With not enough talent capable of implementing the transfer of technological know-how, it fell to Mori. He was re-employed after retirement to train young engineers.

     Mori trains Thai engineers using a textbook he wrote, together with materials prepared by the company. His 50-page textbook includes detailed illustrations of problems that arise during production.

     The steel company is also looking to strengthen overseas operations by exporting technological know-how to other markets. International Crankshaft, a shaft production subsidiary based in the U.S. state of Kentucky, began production of forged shafts -- core auto engine parts -- in 1992 under the former Sumitomo Metal Industries.

     Most of the crankshaft company's business is done outside the Japanese business community. About 60% of the clients are non-Japanese. While U.S. rivals have performed poorly for many years, it has steadily expanded its business, building up its technological presence there.

Reinforcing the future

     The success has attracted a great deal of attention from local organizations. In May, a group of 16 officer candidates from the National Defense University's Dwight D. Eisenhower School for National Security and Resource Strategy visited the facility on a study tour.

     The Japanese steel giant is also expanding its forged shaft production in India and China, with plans for Southeast Asian facilities down the road.

     Japan's steel industry is on a high thanks to the economic stimulus implemented by the government of Shinzo Abe, who took office two months after the launch of the newly merged steel company. But anxieties still linger over the possibility that Japan's domestic demand will shrink together with the country's population.

(Nikkei)

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