News
2025 New Year’s Message
Our 20th Anniversary and 2024 in Review
Having marked our 20th anniversary in 2024,I would like to express my sincere appreciation to all JFE Shoji Group
employees around the world who have worked so hard to achieve our goals despite significant changes in our
environment.
Looking back over the past 20 years, our first decade was not exactly smooth sailing due to developments such as the Lehman Brothers collapse, but significant increase in demand for steel in China, we were able to generate
profits primarily in our trading business. Then the environment changed dramatically as China shifted from an
importer to an exporter, leading to an influx of inexpensive steel into Japan and other countries. Due to this
change, in the second half of the decade it became difficult to sustain growth through our traditional
trading-focused business model. Against this background, we strengthened our business investments to
transition our structure built on the pillars of trading and business operations.
This included acquiring Kelly Pipe in 2014, Cogent in 2019, and management rights in CEMCO in 2022 and STUDCO in 2024 to capture demand for flat-steel construction materials in the Americas and Australia, as well as
investments in Malaysian ferroalloy producer OMH and Indian aluminum deoxidizer producer Arfin.
In 2024, it became clear that demand in the Japanese market was shrinking. The construction sector saw business slowed by labor shortages and rising costs for logistics and construction costs. Also, external demand slowed in
the machinery and industrial sectors,and production declined in the automotive sector due to quality and
certification issues.
Despite this difficult environment Asia in terms of demand scale. Demand associated with carbon neutrality and
new energy-related, Japan remains one of the largest steel markets in areas is expected to grow, so how we
engage with both existing and new-growth markets will be crucial.
Overseas, slumping domestic demand in China has resulted in an accelerating influx of inexpensive steel into
other Asian markets. In response to this trend, market prices are declining in each country and trade action
against China is increasing, but Chinese export volumes continue to rise and we expect it will take time for Asian
steel market prices to recover fully. Meanwhile, demand in the USA remains robust, and emerging markets such as India continue to grow, so it is vital that we capture demand from these key regions to increase our earning power.
We are now in the final year of our Seventh Medium-term Business Plan. We expect to achieve segment profit on a real basis of 45–50 billion yen, and I urge everyone to work hard in the remaining three months to achieve our
initial target of 50 billion yen.
Our Long-term Vision
Now let’s consider our long-term vision. We aim to achieve segment profit of 100 billion yen by 2035, and we will
continue to focus on our earning power. While Japan’s domestic demand can be expected to decline as the
country’s population shrinks, Japan will remain our most important region, and domestic business will remain
crucial as we continue working to increase our presence in the market.
Overseas, we will work actively to capture growing demand in areas with high business competitiveness,
promoting business fully transacted locally to drive revenue growth. Following previous efforts in the Americas,
ASEAN and China, by April 2025 we will delegate additional authority to our Australian operations to serve as a
foothold from which to develop surrounding markets as well as the Australian market. In India, where JFE Steel
has agreed to collaborate with JSW, we will step up efforts to maximize our processing capabilities. In Europe,
a coil center will go into operation in Serbia in July 2025, targeting demand for electrical steel sheet products in
Europe. Eventually, we aim to make independent decisions in each region and establish an organizational
structure that emphasizes the best strategies to help each operating company grow.
Eighth Medium-term Business Plan
Under our Eighth Medium-term Business Plan launching in FY2025, we will target segment profit of 45–50 billion
yen on a real basis in FY2024, and 165 billion yen over the plan’s three-year term, including 60 billion yen in the
final year. Domestic business will remain our cornerstone, but we will also capture overseas demand through M&A, business investment and capacity expansion. To make JFE Shoji an even stronger company, we will overhaul
our core systems, foster a culture of diversity, equity and inclusion (DEI), and transform our corporate culture. We will also actively revise our rules and procedures to further delegate authority and emphasize independent
thinking and execution. Through such efforts, we hope to become a company that customers can always rely on
and trust.
Business Environment in 2025
Looking at the global economy, there are concerns about continued geopolitical risks and the fragmentation of
global trade due to national protectionist policies. The U.S. economy is expected to make a soft landing due in
part to a move from monetary tightening to easing, but there is still a risk of recession depending on the policies
of the Trump administration. China’s economic slowdown due to a real estate slump continues, and although the government has announced monetary easing and measures to support the sector, the effectiveness of these
measures remains to be seen.
In Japan, we anticipate a moderate recovery driven by inbound demand and services consumption as well as the normalization of automobile production and increases in capital investment in areas such as the environment and semiconductors. However, the slump in the construction sector remains a concern. In the steel sector, blast
furnace operators are reducing production capacity in line with demand, and structural problems such as labor
shortages are likely to prevent domestic demand from recovering quickly. While we expect supply and demand
conditions to remain challenging, fiscal 2025 will mark the start of our Eighth Medium-term Business Plan, so we will strive to steadily achieve our segment profit target of 50 billion yen.
Changing External Environment
We have experienced major changes in our business environment over the two decades, and changes continue to be seen every day. To address the challenges associated with these changes, we are implementing initiatives for
decarbonization, sustainability and diversity.
For sustainability, we aim to achieve carbon neutrality by 2050, and we continue to pursue initiatives that help to address related problems in global society. Through our domestic operating companies, we are making use of
renewable energy, expanding our biomass fuel business and increasing our handling of electrical steel sheet and high-tensile-strength automotive materials.
We will also continue our DEI efforts,including promoting career development with the aim of achieving 20%
female representation in management by 2030. We will also foster a culture that embraces diverse values as we
revitalize our organization and establish a culture of open discussion.
For green transformation (GX) and digital transformation (DX), we will steadily overhaul our core internal systems and strive to expand new businesses in logistics, recycling,renewable energy and the environment, positioning
them as new growth areas.
Safety, Quality and Compliance
Please remember that safety and quality remain the top priorities in our business. Without these two pillars, we
cannot maintain the trust and appreciation of our customers.Please always keep in mind that safety and quality
must be prioritized in all aspects of our operations.
I also ask everyone to maintain strict legal and regulatory compliance. The JFE Shoji Group is not interested in ill-gotten gains achieved through rule violations. Please remember that irresponsible decisions can undermine trust in our company. We will also continue our efforts to eliminate internal harassment. We realize that awareness of
this issue is growing among our employees, but please do not hesitate to use our hotline if you experience
harassment.
In order for the JFE Shoji Group to remain a great place to work for everyone, please stay mindful of compliance
and responsible behavior.
Final Thoughts
In closing, I encourage all employees to embrace transformation so that we can adapt flexibly to our
ever-changing world. We must constantly reaffirm our values and strengths as well as the reasons behind our
actions. Please think carefully, debate thoroughly and take on challenges readily. Help us instill this culture
throughout the group and strive to transform and challenge our status quo with courage, initiative and an open
mind.
Finally, everything depends on the physical and mental health of everyone in our global group. I sincerely hope
that this will be a fruit-ful and productive year for all of you and your families, and I wish you all a safe and happy New Year.