Industrial Material Makers Cutting Production

Tokyo, Nov. 25 (Jiji Press)--A growing number of Japanese
industrial material producers are reducing output, in response to production cuts by automakers, electronics firms and other manufacturers of end products amid the rapid economic slowdown.

Nippon Paper Industries Co., a unit of Nippon Paper Group Inc.'s
<3893>, has recently begun cutting production by 20 pct at its main plant in
Ishinomaki, Miyagi Prefecture, northeastern Japan.
The major paper firm was even forced to suspend the operation of a
cutting-edge facility the company installed at the plant last year with a
63-billion-yen investment to make paper products for ads flyers.
The plant has been double hit by substantial drops in domestic
shipments and exports, on which it relies for half of its output, plant
manager Masahiro Hirakawa, said.
JFE Steel Corp., meanwhile, plans a wider crude steel output cut of
1.5 million tons in the Sept.-March fiscal second half than a cut of 500,000
tons in the first half.
As a result, full-year output by the core unit of JFE Holdings Inc.
<5411> is expected to drop more than one million tons from the previous year
to 29.5 million tons, the first fall in three years.
Mitsui Chemicals Inc. <4183> halved urethane production in late
October.
Japan Petrochemical Industry Association Chairman Kenji Fujiyoshi
said Japan's economic downturn has never been sharper than the current one.
A senior chemical firm official noted plunging prices of raw
materials, including crude oil, will not help boost material makers'
earnings.
End-product makers are likely to refrain from purchasing materials
for now in anticipation of further purchasing price falls, the official
pointed out.