Annual Report 2002 [PDF/1.6MB]

Fundamental Business Policies1. Enhanced business selectivity /acceleration of asset disposals(1) Steel businessThis remains Kawasho's core area of operations. Our aim is tolead the industry in terms of sales competitiveness as theleading sales agent for the products of the JFE Group.1. Amid significant change within the steel distribution industry,we are leveraging our superior expertise in customer servicesand sales to boost our competitiveness and adopt anincreasingly localized sales response to user requirements.2. We are working to strengthen our domestic and overseasaffiliates to boost our capabilities in terms of sales, localproduct processing and distribution; with this aim in mind,we are reviewing the intra-group distribution of roles in orderto reorganize and consolidate these operations.consolidated liabilities by ¥74.6 billion, to ¥307.8 billion.Since our original target was to achieve a figure of ¥320billion by the end of March 2004, this represented aconsiderable acceleration of the debt-reduction program.We have set a new target figure for outstanding consolidatedinterest-bearing debt of ¥200 billion at the end of March2005. The increased pace of the debt-reduction program willderive principally from a greater drive on the asset-disposalfront, notably with our real estate business, together with agreater focus on enhancing business selectivity andaccelerating disposals.3. Boosted earnings power through cost reductionsWithin a business environment in which sales growth isdifficult to achieve, our focus has switched towardstrengthening cost-reduction efforts in a bid to boostearnings flow and thus help to raise shareholders' equity.(2) Non-steel businessesWe are reviewing these areas in terms of sales potential andrelative competitiveness with a view to promoting enhancedbusiness selectivity. We intend to complete this aspect of ourbusiness restructuring by the end of March 2003.1. We are strengthening the capabilities of our raw materialsbusiness to better support steel trading operations, with anaim to expand JFE Group trading operations.2. In our foods, commodities, machinery, aerospace andelectronics businesses, we are promoting the re-evaluationof individual sectors in terms of their profitability and returnon assets; as well as boosting efficiency and streamliningthese businesses to improve cost-competitiveness, we areconstructing an optimized divisional structure that alsoaccommodates Kawasho Group subsidiaries and affiliates.New Performance Targets( for year ending March 2005)400300Recurring income(consolidated) ¥10.0 billion(parent) ¥6.5 billionInterest-bearing debt(consolidated) ¥200 billion(parent) ¥130 billionbillion yen¥382.4 billionINTEREST-BEARING DEBT (CONSOLIDATED)¥307.8 billionORIGINAL TARGET¥320 billionNEW TARGET2. Significant short-term improvements in RoA and RoEAchieving reductions in our consolidated interest-bearing debtburden is the major goal of the Second Step Plan. In the year2000March 2001 March 2002 March 2004¥200 billionMarch 2005ended March 2002, we succeeded in reducing total8