TOKYO JFE Shoji Trade Corp. has announced a widescale consolidation of its construction steel operations as it tries to cope with continued demand weakness.
The trading wing of Japans second-largest steelmaker said it will merge JFE Shoji Usuiakenzai Corp., which supplies thin steel plate for construction use to the east of the country, with JFE Seibu Usuiakenzai Corp., which supplies the same products to the west of the country.
The new company, which will be formed April 1, also will more closely share its sales strategy with plate supplier JFE Galvanizing & Coating.
JFE Shoji also will integrate JFE Shoji Trade Steel Construction Materials, whose main market is in east Japan, and JFE Shoji Construction Materials Sales, whose main market is in west Japan.
Strengthening the sales organization is getting more important in the market of construction steel products, where domestic demand has been decreasing since the (start of the global financial crisis in 2008), JFE Shoji said.
Although steelmakers are expecting to see a pickup in demand for reconstruction in the countrys tsunami-ravaged northeast region, other areas of construction demand remain very weak.
The countrys trade ministry is projecting steel demand from the housing sector will fall 7.8 percent this quarter compared with the last three months of 2012.
A version of this article was first published by AMM sister publication Steel First.