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| 2010 New Year's Message from President Hiroshi Sato |
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January 5, 2010
On January 5, the first working day of the New Year, President and CEO Hiroshi
Sato gave a New Year's message to company employees. Here is a summary of his
remarks translated from the Japanese.
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| 1. Business Conditions |
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Although the global economy is said to have passed the worst stage, recovery
has been slow in Europe and the United States. Japan, too, has been beset by
looming uncertainties such as the rising yen, the sluggish stock market and deepening
deflation. Business conditions surrounding the Kobe Steel Group are also expected
to remain difficult. In the material sector, there are such uncertainties as
the supply-demand imbalance; tough negotiations to set prices for raw materials;
and moves toward capital tie-ups and business consolidations. In the machinery
sector, private capital investment is expected to be slow. On the other hand,
demand growth in China, India and other emerging economies and the global trend
of reducing greenhouse gas emissions will provide Kobe Steel with great opportunities, because we have a wide variety of energy efficient technologies and products.
Business conditions outside the company are mixed with both favorable and adverse
factors.
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| 2. Profit and Cash Flow |
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Our immediate challenge is to improve our business performance and do our utmost
to reduce loss in fiscal 2009. It is absolutely necessary for us to return to
profitability in fiscal 2010 and pursue further profit growth. For that to happen,
each and every one of us must fulfill one's responsibilities such as maximizing
orders, stabilizing production and cutting costs.
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| 3. Future Direction |
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Our future direction can be summarized as follows: we will maintain stable production
of high-value added, highly profitable “Only One" products made at an appropriate
cost. We will reinforce our organization and develop our human resources, in
order to accelerate our globalization and expand our sales volume. We will achieve
sustainable growth hand in hand with society. We are now discussing our medium-
to long-term vision based on these principles. As the next step, we will draw
up concrete scenarios and announce them as a part of our new medium-term business
plan at an appropriate time. The main points would be as follows:
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3.1. Pursuing Only One products |
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While Kobe Steel boasts wide-ranging distinctive technologies, products and services,
we must continue our incessant efforts to create new value, keeping up with ever-changing
needs in the world. For that to happen, not only research and development staff
but also all other staff involved in sales, product technology and manufacturing
must work together.
We have set up at our head office a project team to enhance our “monozukuri" capabilities,
namely excellence in manufacturing, and have begun new activity for this purpose.
The aim is to enable our head office to grasp, analyze and evaluate objectively
and quantitatively the distinctiveness and strong points of each of our production
sites and to communicate the results so that we can strengthen the monozukiri
skills of the entire Kobe Steel Group.
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3.3. Accelerating our business globalization |
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While the prospects for the domestic market growth are cloudy, emerging economies
such as China and India are showing remarkable development and our customers
are increasingly shifting production and procurement overseas. We must keep pace
with these developments and accelerate our own globalization with a sense of
speed.
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3.4. Building up organizational strength and developing
human resources |
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One of the distinct features of the Kobe Steel Group is its wide variety of
businesses and technologies. If we combine them to enhance our organizational
strength, that will provide us with an unrivaled advantage. That is why it
is important for us to make our Group “barrier-free," removing fences
in terms of organization (division), culture and mentality. I would like you
to recognize more fully the importance of information sharing.
An organization is sustained by its people. At a time when society is changing
at an unprecedented speed, we should be interested in countless things. We
must have an eagle eye to read the shifting tide and must keep improving our
knowledge and skills. Kobe Steel, as a whole, will also aim to develop its
human resources and launch systematic activities.
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3.5. Safety/disaster prevention and living in
harmony with society |
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Safety and disaster prevention and living in harmony with society are the foundation
of our business activities. An internal control system, including enforcing compliance,
was established and put in practice based on our new risk management activities,
which were launched last year. I would like all employees, under the leadership
of our executives, to participate in these activities, recognizing that the activities
are a part of one's duties. We will also continue caring for the environment.
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| 4. Closing remarks |
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Since becoming President and CEO last April, I have visited about 20 plants, works and offices of our Group located in Japan and overseas. It is my intention to continue visiting the various sites of our Group and communicating with people working there. I hope 2010 will be a fruitful and memorable year both for Kobe Steel and all of you. Let us join our hands and work together for that goal.
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