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In the electric furnace industry, demand for steel materials of both construction and manufacturing companies remained low and fell further in the final stages of the fiscal year. Meanwhile, the price of steel scrap, a key raw material, declined considerably from the beginning of the fiscal year.

Given these circumstances, the Group’s net sales declined to ¥73,404 million (down 8.7% year on year) due to a decrease in selling prices of steel materials. However, operating profit increased to ¥4,142 million (up 84.3% year on year) thanks to an increase in the difference between selling prices and the steel scrap purchase price and efforts to ensure sales volume and continuously improve costs.

We proceed with research and development for quality improvement of  rolling products and environment improvement such as waste reduction and the recycling while performing the developement of new section steel product and new steel class. As a result, we received orders for new shape steel products, reduced basic units of existing products, and developed technology related to waste reduction and recycling.

R & D expenses related to these are 11 million yen.

In addition to maximizing the capabilities of the new steelmaking plant, we have developed our own deformed steel such as mast rails for forklift trucks and segment members for tunnels, and Japan's first new deformed rebar TACoil. We will strive to expand sales volume by taking advantage of our extensive product lineup.

In the automotive industry, production volumes in Japan, North America and China decreased year on year. In the construction machinery industry, Japanese manufacturers’ production of hydraulic shovels dropped significantly mainly due to decreased sales and inventory adjustment in China, Southeast Asia, and other countries, and the impact of damage caused by typhoons in Japan. Demand for mining machinery declined primarily in Southeast Asia, reflecting lower resource prices. In the final stages of the fiscal year, the COVID-19 pandemic which began in China also affected production of automobiles and hydraulic shovels.

Given these challenging conditions, the sales volume of parts for the undercarriages of construction machinery, mining machinery wheels and other components decreased substantially, despite efforts to reduce fixed costs through continuous cost improvements and a review of production systems. As a result, net sales totaled ¥174,015 million (down 7.5% year on year) and operating profit stood at ¥1,657 million (down 78.8% year on year).

We are conducting research on weight reduction, design improvement, quality improvement, cost reduction, and research and development on new product development.
With regard to steel wheels and aluminum wheels for automobiles, which are our main products, we were able to achieve results such as accuracy improvement in analysis and evaluation technology, new product development and mass production, and cost reduction and quality improvement for existing products.
For construction machinery parts, we conducted research on cost reduction in the manufacturing process of ultra-large wheels and quality improvement and cost reduction in the manufacturing process of rollers for hydraulic excavators and footwear.
Research and development costs related to these are 582 million yen.

For automobile wheels, we aim to maximize synergies by optimizing the production system to respond to the decrease in domestic demand for steel wheels and cooperating with production and sales in response to expanding domestic and overseas demand for aluminum wheels. In addition, we will strengthen the competitiveness of our production bases through priority investment and continuous improvement, and capture global expanding demand and improve profitability. In addition, we will promote attractive product development in response to automobile manufacturers' needs for lighter vehicle bodies and the spread of EVs.
Undercarriage components for construction machinery and ultra-large wheels for mining machinery will further increase customer trust as a global supplier, work to build a supply system for growth markets, strengthen and expand the supply business, and achieve stable growth. 

The Group worked on the stable supply of electricity in line with its business plan. Net sales came to ¥9,326 million (down 11.7% year on year) and operating profit amounted to ¥852 million (down 30.6% year on year), given the challenging business environment amid lower demand and intensifying price competition.

We will continue to focus on maintaining a stable operating system and supplying electricity with power generation equipment that takes into consideration harmony with the surrounding environment.

The Group operated civil engineering and construction business, real estate leasing including Topy-rec Plaza (Minami-suna, Koto-ku, Tokyo) and a sports club, OSSO, and manufactured and sold synthetic mica and crawler robots. Net sales came to ¥6,558 million (down 6.9% year on year), due in part to the sluggish civil engineering and construction business, and operating profit was ¥893 million (down 42.4% year on year), primarily reflecting a rise in upfront expenses to increase production of synthetic mica used in cosmetics in addition to decreased sales.

The Technology Center is conducting research and development of basic elemental technologies related to the steel business and automobile/industrial machinery parts business. We are also actively promoting research and development in new fields other than the above businesses through industry-academia collaboration. Science Division developed a new synthetic mica product for gas barrier applications.  We have developed a new robot function with a front/back, left/right crawler movement mechanism.

Research and development costs related to these are 522 million yen.

Synthetic mica, which is the basic raw material for cosmetics, is highly evaluated for its high transparency and safety. We will add color mica that feel good to the skin to a wide variety of products and expand sales in Japan and overseas.
The crawler robot is equipped with unique functions such as high-level climbing performance, running on rough roads, forward/backward left/right free running, and automatic running. As an AGV (automatic guided vehicle) that replaces the conventional tire system, we will make a full-scale entry into the market where demand is expected to grow due to labor shortage.