JFE Steel aims to slash costs by $1bn

JFE Steel Corp is looking to slash its costs by ¥100 billion ($1 billion) in the current fiscal year beginning April 1 with a big focus on reducing its raw material expenses.

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“About 70% of our planned savings for this year will come from reducing costs in our upstream operations, and will include a combination of modernising old equipment for higher productivity and by using lower-grade coal and iron ore,” a company official told Steel First.

The company has earmarked some ¥200 billion ($2 billion) in capital spending in the fiscal year 2013, much of it for upgrading its facilities and installing new equipment for pulverizing, transporting and injecting low-grade coal at its eight Japanese blast furnaces.

The steelmaker also plans to use more low-iron-content iron ore as it aims to boost its profitability after seeing its pre-tax profit in the fiscal year that just ended fall by 40% to ¥15.3 billion ($156 million).