In a move to accelerate its restructuring efforts, Sumitomo Metal Industries is considering spinning off two of its iron manufacturing plants into separate companies, company sources said Thursday.
The two are the Kokura Plant in Kitakyushu and the Naoetsu Plant in Joetsu, Niigata Prefecture, both suffering from dwindling earnings.
The plan will be included in the firm's medium-term management improvement program to be announced as early as the end of the month, the sources said.
Kokura Plant produces 1 million tons of steel products annually and Naoetsu 40,000 tons.
Sumitomo Metal is also considering closing down its plant in Wakayama, the sources said.
Through a series of streamlining efforts, the company hopes to shake itself free of the business doldrums due to slumping sales of seamless steel pipes.
In an effort to prop up their seamless steel pipe businesses, Sumitomo Metal and two other major steelmakers -- Nippon Steel Corp. and Kawasaki Steel Corp. -- are reportedly in talks over possible tieups to integrate their pipe production by scrapping excessive facilities.