Japanese steelmakers have a number of systemic
challenges ahead, including tough regulations, sky-high energy
prices and the increasing loss of its automotive industry.
"Electricity is one of
the negative factors which prevents growth in the future. ...
The central government is trying to start up a number of
nuclear (power) plants, but local government is taking a very
cautious position," JFE Steel Corp. president and chief
executive officer Eiji Hayashida told delegates at the World
Steel Associations annual conference in São Paulo.
"As a result, the price of electricity is going up and will
also go up in the future."
Steelmakers also face
high corporate tax rates and regulation on employment, which is
Hayashida said that
while Japanese exports will "certainly have a contribution to
the recovery of the economy," its automotive industry is
starting to shrink, due mainly to a strong currency rate. "They
have already shifted the production base from Japan to
overseas, and that will never come back," he said.
However, the Japanese
industry is far from grim. With a more stable government in
place, along with stronger government action on fiscal
policies, there could be bright spots ahead, Hayashida