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Freelance newscaster Mitsuyo Kusano talks to President & CEO Hiroshi Sato

Contributing to the environment and society as the cornerstone of the Kobe Steel Group's business

Freelance announcer Mitsuyo Kusano talks to Kobe Steel President and CEO Hiroshi Sato

Our social and environmental activities cover the full extent of the Kobe Steel Group's wide-ranging business activities.

We regard social initiatives as one of most important aspects of the Group's business and have specified "contributing to society" as one of the key elements of the basic policy set out in our Medium- to Long-Term Business Vision announced in April 2010.

Freelance newscaster Mitsuyo Kusano talked to Kobe Steel President and CEO Hiroshi Sato about the Kobe Steel Group's environmental and social activities.

It is our duty as a manufacturer to engage in socially aware, environmentally friendly manufacturing.

Kusano:
I first came across Kobe Steel while reporting on the company's rugby team when I worked as a newscaster on shows like NHK's Sunday Sports and TBS' News 23. This time round, I visited the Kakogawa Works and was simply astounded by the blast furnaces. I was given a tour of the manufacturing process, which left me with a genuine feeling that I was seeing one of the foundations of Japanese manufacturing. I also got a real sense of the corporate culture within the Kobe Steel Group and just how proud everyone is to work here.

Sato:
We cover a wide range of operations within the Kobe Steel Group. As well as producing steel, aluminum and copper products, we also manufacture complex machinery. The result is a real melting pot of different values in terms of business, which has created the ideal corporate culture to pave the way for new products and lines of business.

Kusano:
With operations spanning such a wide range of areas, how do you go about tackling environmental issues?

Sato:
We consider it our duty as a manufacturer to provide consumers with safe, reliable, user-friendly products that will help them to lead happy lives. In order to do that, we need to engage in environmentally friendly, socially aware manufacturing. For instance, we reduce CO2 produced as a result of the steelmaking process. We try to reduce CO2 from the products that we supply, too. Both of these approaches help reduce overall CO2 emissions.

If companies take the initiative and do something to help protect the environment, it also raises awareness among employees and their families. Our Kobelco Eco Life Notebook scheme for example revolves around the concept of environmental accounting, so that employees are aware of how much electricity or gas they use at home. It helps encourage people to reduce their energy consumption, even if only slightly.

Developing unique"Only One" products in line with customers' needs helps to reduce environmental impact.

Kusano:
During my visit to the works, I was told about the Kobe Steel Group's "Only One" products. I understand the general meaning of the term"only one," but what specific meaning do you have in mind here at the Kobe Steel Group? I was also told that some of your Only One products help reduce environmental impact.

Sato:
We refer to unique Kobe Steel Group products, technologies and services that no other company could hope to imitate as "Only One" products. The sort of value that customers are looking for changes over time. Vehicles for instance are now required to be lightweight and fuel-efficient. By actually providing that sort of value, you inevitably end up with environmentally friendly products that help reduce CO2 emissions.

Only One products account for over 40% of all Kobe Steel Group products. Half of those products help to reduce environmental impact.

Hydraulic excavators, as used in the construction industry, are a prime example. Our excavators are extremely fuel-efficient and are selling more and more in China. Responding to demand for increased fuel efficiency ultimately helps reduce environmental impact.

Kusano:
I see examples such as those are included in the special feature in this year's report, entitled "Reducing CO2 Emissions through 'Only One' Products." The specific figures are very easy to understand and give a real sense of the scale on which your products help protect the environment.

I want individual employees to find their own meaning for the three Gs in our Medium- to Long-Term Business Vision.


Kusano:
What does the"G" stand for in KOBELCO VISION "G", the Kobe Steel Group's recently unveiled Medium- to Long-Term Business Vision?

Sato:
As of the end of March 2010, the Kobe Steel Group consisted of a total of 262 companies. In order to keep on growing as a group, we need to actively expand operations overseas. To do that, we need to harness and share the expertise that we possess. With that in mind, we came up with "VISION G" based on the concepts "global,""growth" and "group."

I also want individual employees to find their own meaning for "G." It could be anything, from "genki" (vibrancy) to "gyomu-kaikaku" (operational improvements) or "genba-ryoku" (frontline capabilities). I want individual employees to decide what "G" means to them and then work together to achieve growth. That is what VISION "G" is all about.

Kusano
Kusano:
I would like to know more specifics about those three key concepts. In terms of "global" first of all, what sort of strategy do you have in mind?

Sato:
Our products offer outstanding levels of quality, performance and functionality and have a proven track record in the Japanese market. We therefore intend to actively target those same products at emerging markets such as China, Southeast Asia, the Middle East and Latin America.

Kusano:
I understand that the world's first commercial ITmk3® Plant began operation in January this year and that you're now planning to apply the process in Vietnam. What exactly is ITmk3?

Sato:
It is a new ironmaking technology that uses resources that were previously unutilized and has minimal impact on the environment. As it stands, there isn't enough scrap available to produce the steel needed to construct bridges, roads and other infrastructure in emerging countries. We therefore developed ITmk3® as a new ironmaking process that uses low-grade iron ore and coal, which have always been underutilized in the past, to produce iron quicker and cheaper than blast furnaces. By introducing pulverized iron ore into a donut-shaped rotary hearth furnace, it is possible to turn it into high-quality iron in around ten minutes. This method could reduce energy consumption and CO2 emissions compared with the many small-scale blast furnaces dotted around emerging countries and other parts of the world and will also help revitalize mining communities that once supplied high quality iron ore, but have run dry, as in Minnesota.

In China meanwhile, we are aiming to provide a steady supply of aluminum auto parts in an effort to help popularize lightweight, fuel-efficient cars. The fact that aluminum parts are easily recyclable can also help to reduce environmental impact.

Sato
Kusano:
From what you have said so far, you seem to be supplying products and services in line with new demand as it emerges in various different corners of the world.

Sato:
That's precisely what we're doing. In order to cater to new demand however, you not only need to develop new technology, but you also need to train people to operate that technology. Our commitment to groupwide growth on both a technical and a human level is encapsulated in the second key concept: "growth."


"Barrier-free" as a key concept within the Group's business for the future

Kusano:
What is the thinking behind the concept "Group"?

Sato:
We are aiming to improve coordination between the Kobe Steel Group's wide-ranging operations in order to breathe new life into the Group as a whole. We like to call this a"barrier-free" approach. As organizations become more established, barriers tend to form around them. If we can break down those barriers, so as to enable organizations to actively discuss matters with one another and individual employees to work together outside their respective organizations, we will also be able to break down any barriers between our customers and ourselves.

Kusano:
Will the MONODZUKURI Planning & Promotion Department established in April this year also be based on this same "barrier-free" approach?

Sato:
Within the Kobe Steel Group, some plants have outstanding welding technologies for example and others have achieved outstanding results in areas such as scaling back inventories and automating operations. Our aim in setting up the MONODZUKURI Planning & Promotion Department is to share information and expertise from frontrunners such as these with the rest of the Group. We hope to combine the strengths of individual group companies to create barrier-free projects.


Taking CSR to the next level by contributing to society and the environment through our products and business activities

Kusano,Sato
Kusano:
Environmental and social initiatives and CSR activities have always been a way for companies to hedge their risks in some respects. Based on what you have said however, I get the sense that it runs deeper than that. It feels like the desire to contribute to the environment and society runs throughout your management practices on a groupwide level. What are your plans for the future in terms of contributing to the local community?

Sato:
When carrying out CSR activities, I believe companies have to want to actively contribute to society and fulfill their social responsibilities. We therefore intend to adopt a barrier-free approach to working with communities and local people in the future. At the start of our conversation you mentioned rugby, which is one of the key pillars of our CSR activities. For example, we provide access to human resources and facilities at the Kobe Steel Rugby Club in order to help promote rugby via the NPO SCIX. As well as rugby, we encourage our employees to use their expertise and skills for the benefit of the local community by helping out with other activities, too.

Kusano:
I assume it is also important to you to publicize your environmental and social activities as widely as possible.

Sato:
That's true. In fact, I received a letter from a housewife in Tokyo just the other day. After the recent earthquake in Chile, we sent over a team of three engineers in an effort to put our experiences from the Great Hanshin Awaji Earthquake to good use and help restore a steelworks. She had read about that in the paper and was so moved that she decided to write a letter. I was delighted.

As "contributing to society" is one of the key elements of our Medium- to Long-Term Business Vision, we will continue to fulfill the Kobe Steel Group's social responsibilities in a variety of different ways in the future. I believe that publicizing such activities through our sustainability reports and in the media acts as a source of encouragement for our employees.

Kusano:
Having spoken to you here today, I realize what a tremendous contribution your products, technologies and services make to the environment and society.

When companies talk about CSR, they are often referring to activities such as planting trees in rural villages. But I am convinced that the Kobe Steel Group is taking CSR to the next level, through its commitment to developing products that directly reduce environmental impact and fulfilling its social responsibilities.

Profile
Mitsuyo Kusano

Worked for Japan Broadcasting Corporation (NHK) from 1989, including positions as newscaster on NHK Morning Wide and NHK Sunday Sports, host of Kohaku Uta Gassen and overseas presenter for the Atlanta Olympics. Since leaving NHK in 1997, Kusano has worked as a freelance newscaster, including positions as presenter on Chikushi Tetsuya News 23 on TBS.
Mitsuyo Kusano

  Kobe Steel Group Medium- to Long-Term Business Vision
KOBELCO VISION "G"
Creating New Value and Aiming for Global Growth

 
Kobe Steel Group Vision (fiscal 2015-2010)
By further integrating our unique expertise and technologies across a diverse range of material- and machinery-related businesses, we will establish the Kobe Steel Group as a corporate group that:

* Has a presence in the global market
* Maintains a stable profit structure and strong financial foundation
* Prospers hand in hand with its shareholders, business partners, employees and society
Basic Policy
We will target growth markets the world over through "Only One" technologies, products and services that are unique to the Kobe Steel Group.

Key initiatives
1. Dedicating ourselves to"Only One" products, technologies and services
2. Further strengthening manufacturing capabilities
3. Expanding into growth markets
4. Harnessing the combined capabilities of the Kobe Steel Group
5. Contributing to society