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Japanese steelmakers to invest over US$20B over next 3 years to increase output

Japanese steelmakers Nippon Steel & Sumitomo Metal Corp. and JFE Holdings Inc. plan to invest over US$20 billion in the next three years to overhaul plants in a bid to reduce costs and increase output of the high-quality metal, Bloomberg News reported March 8.

The investment plans come as the companies face competition in the high-quality metal market for electric vehicles from competitors including Luxembourg-based ArcelorMittal, South Korea's POSCO and Chinese producers.

In its 2020 mid-term management plan, Nippon Steel said that its capital expenditures in Japan will be about ¥1.700 trillion over the three-year term, an increase of ¥350 billion from the 2017 plan.

The company said March 2 that it will use the funds to introduce advanced equipment at its facilities, to maintain them and strengthen its production capability.

Nippon Steel will also invest about ¥600 billion over three years in its domestic and overseas businesses.

Meanwhile, JFE Holdings said mid-February that it will spend over ¥650 billion over the next three years to upgrade its domestic production facilities to increase productivity and competitiveness.

The upgrades will help the Japanese steelmaker meet the auto industry's growing demand for lighter steel and materials to make electric cars.

JFE's Executive Vice President Shinichi Okada said that the company plans to increase its output from Japan to 30 million tonnes, from 28 million tonnes previously.

As of March 8, US$1 was equivalent to ¥106.12.