The protracted economic slowdown has forced most domestic materials manufacturers to step up restructuring efforts and keep their heads bent low in the hope that the biting winds of recession will eventually die down.
Steelmakers, nonferrous material manufacturers, paper firms, chemical companies — most say they expect domestic demand in the current fiscal year to fall or at best remain at the same level as fiscal 1998 due to slack consumer demand and corporate investment.
As a result, many have begun to prioritize stripping themselves of excess personnel and capacity.
For example, Kawasaki Steel Co. is testing to see how far it can reduce operations at the No. 5 blast furnace at its steelworks in Chiba due to a drop in production of crude steel. The furnace is slated to be shut down completely in the future.
In February, company officials decided to slash operations at the furnace to below 50 percent of its capacity — an industry first.
When the rate of production to capacity falls drastically, it can damage the furnace and lessen its ability to produce high-quality steel.
Company officials said they took special care, such as frequent inspections by employees, to ensure that the lower rate of operation did not hurt its production.
The pains of the recession are hurting others in more or less the same fashion. Aluminum manufacturers say that while there is a slight rise in demand for window frames as housing starts pick up, a healthy rebound is not apparent anytime soon.
Pulp makers said they have their hopes pinned on robust demand expected from the rise in demand for leaflets and catalogs for commemorative events ahead of 2000. But domestic demand will not pick up dramatically, industry sources admit.
Because of this, industry leader Oji Paper Co. has already said it will close down a plant in Wakayama Prefecture by the end of next year.