(Bloomberg) -- Japan's oldest and largest steelmaker is cutting capacity as it contends with shrinking domestic demand and pivots operations to help meet the nation's ambitious target of net-zero emissions by 2050.
Nippon Steel Corp. will shut one of its largest domestic blast furnaces near Tokyo as well as production lines to trim its steelmaking capacity, according to a statement on Friday. That along with previously announced measures will cut its capacity by 20% by March 2025. The company also aims to lower carbon dioxide emissions from its operations 30% by 2030 from 2013 levels, it added.
President Eiji Hashimoto is pushing through structural reforms to fend off challenges from faster growing foreign rivals -- particularly top producer China. Competition is now spreading to the development of fossil fuel-free steel manufacturing after governments in Europe, China and Japan pledged net-zero emissions in the coming decades.
Innovations for decarbonization, including the development of hydrogen reduction steel production, will require research and development costs of about 500 billion yen ($4.6 billion) and as much as 5 trillion yen in investment in facilities, the company said, which could double the cost of steel over the next 30 years.
- A series of shutdowns, including previously announced measures, will affect more than 10,000 employees at Nippon Steel and contract workers at affiliated firms, Hashimoto said at a briefing on Friday.
- The steelmaker isn't considering job cuts through early retirement and plans to relocate staff to other production sites, he added.
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