presentation material on results for fiscal year ended march 2013

Shinagawa Refractories 　 Presentation of Results for Fiscal Year Ended March 2013

1

Presentation Material on Results for Fiscal Year Ended March 2013


June 10, 2013June 10, 2013

Securities Code Number: 5351

― Supporting the World’s Key Industries Through Technologies ―

Shinagawa Refractories― Supporting the World’s Key Industries Through Technologies ―

Shinagawa Refractories

Shinagawa Refractories 　 Presentation of Results for Fiscal Year Ended March 2013 2

Table of Contents

I. Corporate Profile

II. Overview of Financial Results

III. Future Strategies

1. History

2. Basic Management Goals (Formulated on October 1, 2009)

1. Market Trend: Changes in Crude Steel Production

2. Basic Policies for Medium-Term Management Plan (FY2012-FY2014)

3. Medium-Term Management Plan: Review of FY2012

4. Measures for FY2013 (1) Reinforcement of Domestic Sales Capability

(2) Establishment of Optimal Production System

(3) Improvement of Technical and Cost Competitiveness

(4) Promotion of Overseas Business Expansion

5. Medium-Term Growth Vision

1. Consolidated Financial Highlights for Fiscal Year Ended

March 2013

(1) Operating Environment and Measures

(2) Operating Results

2. Net Sales by Business Segment

3. Operating Income by Business Segment (Segment Profit)

IV. Supplementary Notes

4. Factors Behind Changes in Operating

Income (Year-on-Year Comparison)

5. Consolidated Balance Sheets

6. Consolidated Cash Flows

7. Outlook of Consolidated Earnings for Fiscal

Year Ending March 2014

6. Key Features and Strengths (2) Solid Customer Base7. Key Features and Strengths (3) Global Business Expansion8. Current Status of the Expansion of Overseas Business Locations9. Domestic and Overseas Production System10. Global Procurement System

1. Changes in Net Sales and Ordinary Income During Past 11 Years (Consolidated Basis)2. What are the Roles of the "Refractory Industry"?3. Major Products4. Key Features and Strengths5. Key Features and Strengths (1) Ultra-High Temperature Technology


3

I. Corporate Profile


1. History

Shinagawa Refractories Co., Ltd.

[Established in 1875]

JFE Refractories Corporation

[Established in 1938]

Aiming to solidify operational base and establish a steady supply Aiming to solidify operational base and establish a steady supply system through further expansion of the refractories businesssystem through further expansion of the refractories business

Merged on October 1, 2009Merged on October 1, 2009

(First private company in Japan to manufacture fire bricks)

Shinagawa Refractories Co., Ltd.

Will promote the streamlining of operations through the prompt realization of integration effects and focus on the development of

a management base to respond to environmental changes

(Operated as a subsidiary of the Kawasaki Steel Corporation Group since 1944)


2. Basic Management Goals (Formulated on October 1, 2009)

Following the merger to create the new “Shinagawa Refractories,” five basic goals were formulated.

(i) To be the world’s leading supplier of a full range of refractory products

(ii) To be responsive to the needs of our customers

(iii) To enhance the well-being of our shareholders, customers, and the communities that support us

(iv) To provide our employees with a safe, pleasant and rewarding workplace

(v) To remain profitable with a solid financial base that supports the aforementioned goals

Basic Goals of Shinagawa RefractoriesBasic Goals of Shinagawa Refractories


6

II. Overview of Financial Results


1. Consolidated Financial Highlights for Fiscal Year Ended March 2013 (1) Operating Environment and Measures

[Operating environment] Remained extremely challenging overall

● Steel industry　　 First half of the year: Impact of strong automobile sales due to subsidies for eco-friendly cars Second half of the year: Impact of a decline in sales as a reaction

Crude steel production for FY2012 increased by 0.8% year on year to 107 million tons (impact of Great East Japan Earthquake in the previous fiscal year)

● Amid sluggish domestic demand, operating environment remained tough as our exporting activities and overseas subsidiaries were significantly affected by yen appreciation up to the end of previous year as well as a decline in sales in overseas markets.

[Key measures taken during FY2012]　

Worked on the reinforcement of domestic sales capability, establishment of optimal production system, and promotion of overseas business expansion as key initiatives.

● Completed the consolidation of production of magnesia-carbon bricks as the second stage of the establishment of optimal production system across the Company (first half of the year)

● Commenced the consolidation of production of slide-gate plates, nozzles, etc. primarily used during the continuous casting process as the third stage ( aiming to complete the consolidation during FY2013)


1. Consolidated Financial Highlights for Fiscal Year Ended March 2013 (2) Operating Results

● Net sales decreased by 3.7% year on year due to a decline in sales in overseas markets and in sales of overseas subsidiaries, reflecting the sluggish European economy and slowdown in growth in the Chinese economy. This was despite production and sales of refractories for domestic markets remaining unchanged from the previous fiscal year.

● Operating income plunged by 20.5% year on year while ordinary income was diminished by 12.1% year on year.

● Net income increased by 28.9% year on year due to the non-existence of loss on disaster of 352 million yen recognized for the previous fiscal year, among other factors.

Net sales

Results Initial forecast* Results

Operating income

Ordinary income

Net income

103,038

6,000

5,864

1,998

103,300

5,700

5,500

3,000

99,204

4,770

5,154

2,576

FY ended March 2012 FY ended March 2013

-3.7%

-20.5%

-12.1%

+28.9%

YoYAgainst initial

forecast

-4.0%

-16.3%

-6.3%

-14.1%

(Unit: million yen)

*Initial forecast: Figures announced on May 10, 2012


Refractories and related productsRefractories and related products Furnace construction and engineeringFurnace construction and engineering Real estate, leisure, etc.Real estate, leisure, etc.

(Million yen) (Million yen) (Million yen)

Total 103,038 -3.7%

Refractories and related products

Furnace construction and engineering

Real estate, leisure, etc.

76,171

24,044

2,822

-5.8%

+3.3%

-7.3%

73.9

23.3

2.8

100.0

2. Net Sales by Business Segment

Results

FY ended March 2012YoY

FY ended March 2012

FY ended March 2013

FY ended March 2012

FY ended March 2013

FY ended March 2012

FY ended March 2013

Note: Figures in square brackets [ ] indicate net sales share (%) by business segment.

(Unit: million yen)

-4,429 +801-205

99,204

71,741

24,846

2,616

72.3

25.0

2.7

100.0

Results

FY ended March 2013


5,950 100.0

4,770

-1,179

4,063

715

1,171

68.3

12.0

19.7

Results

FY ended March 2012YoY

Results

FY ended March 2013

10

3. Operating Income by Business Segment (Segment Profit)

Total 7,085 -16.0%100.0

Total operating income 6,000 -20.5%

Adjustment -1,084 ―

Refractories and related products

Furnace construction and engineering

Real estate, leisure, etc.

5,244

486

1,353

-22.5%

+46.8%

-13.5%

74.0

6.9

19.1

Note: Figures in square brackets [ ] indicate operating income share (%) by business segment.

(Unit: million yen)

-1,181 +228 -182

FY ended March 2012

FY ended March 2013

FY ended March 2012

FY ended March 2013

FY ended March 2012

FY ended March 2013

Refractories and related productsRefractories and related products Furnace construction and engineeringFurnace construction and engineering Real estate, leisure, etc.Real estate, leisure, etc.

(Million yen) (Million yen) (Million yen)


4. Factors Behind Changes in Operating Income (Year-on-Year Comparison)

47.7

(Million yen)

Reduced cost of

refractories

+4.0

Quantity, sales price, product

lineup of refractories

-11.3

60.0

FY ended March 2012

(Unit: 100 million yen)

Decline in profit as a result of decrease in

sales of affiliates

-3.9

Others

-1.1

Positive factors+4.0

Negative factors

-16.3

Change in amount 　 -12.3

FY ended March 2013


・ Notes and accounts receivable-trade: -1,306

・ Investment securities: +1,919

・ Notes and accounts payable-trade: -2,231 ・ Short-term loans payable: -1,149

・ Long-term loans payable: -915

・ Retained earnings: +2,104

・ Valuation difference on available-for-sale securities: +1,343

・ Capital adequacy ratio: 35.6% (up 3.5 points)・ Interest-bearing debt/cash flow ratio:

5.3 years (improved by 3.3 years)

-1,856

Change

+2,048

+191

-3,315

-731

-4,047

+2,104

+1,713

+422

+4,239

+191

5. Consolidated Balance Sheets

Current assets 61,28563,141

Noncurrent assets

Total assets

Current liabilities

Noncurrent liabilities

Total liabilities

Shareholders' equity

Accumulated other comprehensive income

Minority interests

Total net assets

Total liabilities and net assets

FY ended March 2012

FY ended March 2013

45,39543,347

106,681106,489

44,89148,207

18,94119,673

63,83367,881

36,04733,943

1,922209

4,8774,454

42,84738,608

106,681106,489

(Unit: million yen)


6. Consolidated Cash Flows

・ Income before income taxes and minority interests: 4,704

・ Depreciation and amortization: 2,520・ Decrease in notes and accounts

receivable-trade: 1,594・ Decrease in inventories: 1,453

・ Decrease in notes and accounts payable-trade: -2,351

・ Income taxes paid: -1,762

+2,109

Change

-840

+2,378

+672

Cash flows from operating activities 6,0643,954Cash flows from investing activities

Cash flows from financing activities

Cash and cash equivalents at the end of period

FY ended March 2012

FY ended March 2013

-2,808-1,967

-2,707-5,085

10,1539,480

(Unit: million yen) [Main contents of cash flows from operating activities]

・ Purchase of property, plant, and equipment: -2,066

・ Repayments of guarantee deposits received:-412

・ Proceeds from issuance of bonds: 395・ Decrease in short-term loans payable: -2,340・ Redemption of bonds: -140・ Cash dividends paid: -471

[Main contents of cash flows from investing activities]

[Main contents of cash flows from financing activities]


7. Outlook of Consolidated Earnings for Fiscal Year Ending March 2014

Net sales

Forecast

Operating income

Ordinary income

Net income

99,204

4,770

5,154

2,576

96,500

4,500

4,400

2,300

FY ended March 2013 FY ending March 2014

-2.7%

-5.7%

-14.6%

-10.7%

YoY

(Unit: million yen)

Results

Note: Figures in square brackets [ ] indicate ratios against net sales (%).

100.0

4.8

5.2

2.6

100.0

4.7

4.6

2.4

[Background]

● The outlook of the Japanese economy remains uncertain due to the European financial crisis and economic slowdown of emerging economies such as China, despite signs of a turnaround backed by anticipation for economic recovery measures in the future.

● The situation is increasingly challenging as production costs are expected to rise further as a result of higher procurement costs for raw materials and fuels due to the depreciation of the yen since the beginning of the year.


15

III. Future Strategies


1. Market Trend: Changes in Crude Steel Production

851904

9691,061

1,1461,248

1,347 1,3411,235

1,4311,529 1,547

102110 111 113 113 118 122

10696

111 106 107

0

500

1,000

1,500

2,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

50

100

150

200

250

300

Crude　steel　production　in　the　world　( calendar　year)

Crude　steel　production　in　J apan　(fiscal　year)

● Global crude steel production has been increasing on the back of rapid economic growth, etc. of emerging economies in Asia such as China.● Meanwhile, domestic crude steel production has remained at the level of around 110 million tons per year for the past 10 years.● With regard to market environment forecasts, while crude steel production is expected to remain virtually flat in Japan in the future, a growth trend is anticipated globally.

(Million tons) (Million tons)

Virtually flatVirtually flat

Growth trendGrowth trend

Source: “Global Changes in Crude Steel Production” (World Steel Association); “Overview of Steel Production” (Japan Iron and Steel Federation)


2. Basic Policies for Medium-Term Management Plan (FY2012-FY2014)

(1) Reinforcement of domestic sales capability

(2) Establishment of optimal production system

(3) Improvement of technical and cost competitiveness

(4) Promotion of overseas business expansion

(5) Enhancement of safety measures and compliance

Aiming to remain profitable and achieve further growth in order to be the world’s leading supplier of a full range of refractory products

in the increasingly competitive domestic market and in overseas marketswith future growth potential


3. Medium-Term Management Plan: Review of FY2012

(1) Reinforcement of domestic sales capability

(2) Establishment of optimal production system

(3) Improvement of technical and cost competitiveness

(4) Promotion of overseas business expansion

(5) Enhancement of safety measures and compliance

Achieved certain results for the expansion of sales channels through the development of exclusive productsincluding new mold powder products, dense magnesia-carbon bricks for converters, etc.

The second stage of production consolidation was completed by September 2012 in accordance with the planand the third-stage consolidation project has been commenced.

● Achieved certain results for orders received both domestically and internationally on the back of steady progress in the development of new products and technologies● Stabilized the raw material procurement system through multiple procurement routes in China and the expansion of routes outside China

Made progress in building the foundation for overseas business expansion by steadily solidifying relationships with local companies in China, India, and Brazil, which we have focused on as future targets

Promoted activities toward the elimination of industrial accidents and enhancement of the compliance system


4. Measures for FY2013 (1) Reinforcement of Domestic Sales Capability

Speedy response to meet the needs of customers

Promotion of sales of highly functional and exclusive products

・ Highly durable tuyere bricks for

bottom-blowing converters

・ Highly functional submerged entry nozzle

・ Highly durable slide-gate plates

・ Dense magnesia-carbon bricks for converters, etc

・ Highly durable tuyere bricks for

bottom-blowing converters

・ Highly functional submerged entry nozzle

・ Highly durable slide-gate plates

・ Dense magnesia-carbon bricks for converters, etc


4. Measures for FY2013 (2) Establishment of Optimal Production System

Monolithic refractories

Shaped refractories,

etc.STEP 2STEP 2

Functionalshaped

refractoriesSTEP 3STEP 3

STEP 1STEP 1

1H 2H 1H 2H 1H 2H 1H 2H

FY ended March 2011

FY ended March 2012

FY ended March 2013

FY ending March 2014

●Magnesia-carbon bricks (AkoOkayama)

●Precast shapes (HinaseAko)

●Plastic refractories (OkayamaAko)

●New firing furnace for slide-gate plates (Okayama)

●Slide-gate plates, nozzles, etc. (AkoOkayama)

Completed●Relocation between east and west●Product consolidation in the western Japan region

Completed

To be completed In March 2014

(i) Magnesia-carbon bricks(ii) Fire clay and alumina bricks(iii) Slide-gate plates, nozzles, porous plugs (iv) Basic bricks

Consolidated the manufacturing of shaped refractories other than submerged entry

nozzle products as a mother plant

(i) Magnesia-carbon bricks　　 (Completed in September 2012)(ii) Slide-gate plates, upper and lower nozzles

Specializes in monolithic refractories (+ precast shapes)

ConsolidationTo be completed

in March 2014


4. Measures for FY2013 (3) Improvement of Technical and Cost Competitiveness

● Development of original and competitive products

● Development and improvement of unrivaled, high-quality products

● Manufacturing of products with superior cost competitiveness

● Development of a design and installation system that is trusted by customers

● Reduction in purchase prices of raw materials, etc.

Key measures

Introduction of examples of specific measures



(i) Improvement of durability of MHP tuyere bricks for BOF* MHP: Multi Hole Plug

*

With the use of special graphite, significantly reduced cracking and spalling

due to thermal stress during usage

Wear rate improved by

30-40%

After using the new product After using an existing product

* BOF: Basic Oxygen Furnace (Converter Furnace)

*



(ii) Highly adhesive basic gunning refractories

[Comparison with existing products]

Use of a special new binder　　　 Relatively unaffected by temperature (greater acceptance limit of the amount of added water against hardening property)

　　　 Significant improvement in adhesiveness

Popular for use in repairing gunning refractories apply for electric furnaces, ladles, and RH degassers

(iii) Non-cement alumina magnesia casting refractories

As they do not contain CaO (calcium oxide) derived from cement, they have excellent slag penetration resistance.

With a special micro structure, they have excellent spalling resistance.

Used for nozzle bricks for ladles, Precast-shaped well blocks for purging plug. Durability has been improved by approximately 20%.



● Enhanced carbon-bonding by non-oxidation firing method● Reaction of additives with atmospheric gas to reinforce carbon-bonding　　　　　　 Extremely minor damage to surface and edge around holes

● Homogenization of temperature distribution on firing　　　　　Minimization of variability in quality

● Enhanced productivity

(iv) Non-oxidation firing furnace for firing slide-gate plates New process used

New material Conventional material

Worn area


4. Measures for FY2013 (4) Promotion of Overseas Business Expansion

North AmericaNorth America

AustraliaAustraliaAreas in which the Shinagawa Refractories Group has existing overseas business sites and offices

IndiaIndia

BrazilBrazil

[Overseas Production System of the Shinagawa Refractories Group]

Areas in which the Shinagawa Refractories Group is considering establishing new overseas business sites

ChinaChina

● Reinforcement of management foundation of existing overseas subsidiaries

● New business expansion in emerging economies such as China, India, etc.

● Development of global human resources

Continue to take measures to maximize the advantage of locations close to raw material production centers and customers both for existing and new businesses

Aiming to establish business sites quickly as future growth can be expected as a result of an increase in on-site production by customers (JSW, etc.)

China

India


5. Medium-Term Growth Vision

Covering a broad range of the world’s best refractory-related technologies with high cost competitiveness

Technology

Products

Broad product lineup

Sales capability

Provision of comprehensive solutions

●Shaped refractories

●Monolithic refractories

●Mold powder

●Ceramic fiber

●Advanced ceramics

●Chemical and other

products

●Development of materials

●Manufacturing technology

●Installation technology

●Furnace body analysis

●Diagnostic technology, etc.

●

Desig

n ●

Ma

nu

factu

ring

●

Insta

llatio

n

●

Ma

inte

nan

ce

●

Rep

air

Global supplier of a full range of refractory products with comprehensive capabilities across three key axes


27

IV. Supplementary Notes


1. Changes in Net Sales and Ordinary Income During Past 11 Years (Consolidated Basis)

52,78056,347 56,730

62,161

73,849

79,64884,565

81,64084,408

101,070 103,03899,204

1,5971,919

2,5332,789

3,986

4,659 4,810

2,949

2,400

5,804 5,864

5,154

0

20,000

40,000

60,000

80,000

100,000

120,000

March2002

March2003

March2004

March2005

March2006

March2007

March2008

March2009

March2010

March2011

March2012

March2013

0

2,000

4,000

6,000

8,000

10,000

12,000Net　sales Ordinary　income(Million yen) (Million yen)

Merged on October 1, 2009Merged on October 1, 2009

Consolidated financial results for the fiscal year ended March 2010 combine the consolidated financial results of Shinagawa Refractories Co., Ltd. for the first half of the year prior to the merger and consolidated financial results of the new merged company for the second half of the year.


2. What are the Roles of the "Refractory Industry"?

● Many varieties of materials used in public infrastructure such as iron and steel, nonferrous metals, cement, glass, etc. are manufactured in furnaces with refractory lining.

● The refractory industry provides foundational support to key industries through engineering feats, such as the manufacturing of refractories, furnace design, furnace construction, etc.

Refining of molten steel in converter

Fire bricks for converters

Refractory lining

Furnace construction

using fire bricks


3. Major Products 1/2

Refractories

Shaped refractories Monolithic refractories Mold powderShaped refractories (“fire bricks”) provide basic support to industrial furnaces and ultra-high temperature processing facilities

A complete system package including “product, design, installation and after-sales service” that can suit a wide range of applications

An essential component of high-quality steel(Powder-type material added to maintain the surface temperature inside casting molds. It prevents the steel from oxidizing and acts as a lubricant during the continuous casting process used to manufacture steel ingot plates and rods)

●Magnesia-based bricks●Carbon-containing bricks●Fire-clay and high-alumina bricks●Functional products for continuous casting●Silicon carbide bricks●Silica bricks, etc.

●Castable refractories●Precast shapes●Gunning refractories●Plastic and ramming mixes●Refractory mortars, etc.

Refractories are industrial materials that can resist ultra-high temperatures in excess of 1,500 degrees Celsius. Approximately 80% of refractory production is consumed by the steel industry.


3. Major Products 2/2

Ceramic fiber Advanced ceramics

Chemical and other products

Lightweight material featuring low thermal conductivity and high thermal insulation, making it essential for energy-saving

Ceramic material with a broad range of characteristics including excellent electrical insulation properties, abrasion resistance, corrosion resistance, chemical stability, mechanical strength, etc.

Heat-resistant paint, heat-resistant adhesives, multifunctional absorbent, desiccant, etc. with applicability to ceramic materials technologies


4. Key Features and Strengths

　　 Leading company in terms of ultra-high temperature technologies

　　 Solid customer base thanks to technological capabilities

　　 Aggressive global business expansion

1

2

3


5. Key Features and Strengths (1) Ultra-High Temperature Technology (i) Two Technologies

Solid technology development and commercialization capabilities underpinned by two technologies

Leading company in terms of ultra-high temperature technology

Refractorymanufacturing

technology

Advancedfurnace

construction technology

●Refractories●Ceramic fiber●Advanced ceramics●Chemical products and other products

Customer-oriented technological response

Development capability to meet customer needs

●Furnace design●Engineering services　　・ Furnace construction work

for blast furnaces, converters, incinerators, etc.

　　・ Ultra-fast relining of blast furnaces and hot stoves

　　・ Maintenance of furnaces used by iron and steelmaking works, etc.

＋


5. Key Features and Strengths (1) Ultra-High Temperature Technology (ii) Customer-Oriented Technological Response

Work closely with customers at all times backed up by technologies and long track records of four divisions covering design, manufacturing, furnace

construction, and development.

Work closely with customers at all times backed up by technologies and long track records of four divisions covering design, manufacturing, furnace

construction, and development.

DesignDesign

ManufacturingManufacturing

Analysisand

development

Analysisand

development


and repair


and repair

Engineering DepartmentEngineering Department

WorksWorks

Research CenterResearch Center

Furnace Construction DivisionFurnace Construction Division


5. Key Features and Strengths (1) Ultra-High Temperature Technology (iii) Development Capability to Meet Customer Needs

With world-class research facilities, the Research Center focuses on the development of products to meet the needs of customers

With world-class research facilities, the Research Center focuses on the development of products to meet the needs of customers

Analysis of microstructures of refractories Water model simulation of molten steel flow in the mold

Structural analysis of converters

SEI(×500)

Zr O

AISi

EDS analysis data(color map)

Elements present in the area can be detected in a short period of time.


6. Key Features and Strengths (2) Solid Customer Base

Solid customer base thanks to technological capabilities

Meeting the needs of customers in various industries including the Japanese steelmaking industry, which boasts

the best technology in the world

Ultra-high temperature technologies are fundamental technologies for many industries

Steel industry is the main customer, accounting for approximately 80% of customer base

From the material industry to the field of energy production, environmentally friendly ultra-high temperature technologies are fundamental to all.

Steel Nonferrous metal

Cement

GlassChemicals

Incinerator, waste melting

furnace

Gas, electricity

etc.

Automobiles, ships and other transport equipment, buildings and various steel products

Sheet glass, bottle glass, flat-panel display glass, fiber optics

Net sales share by customers

FY ended March 2012 (non-consolidated)

Steel81.7%

Incinerators

5.1%

Cement0.9%

Others 12.3%


7. Key Features and Strengths (3) Global Business Expansion

Aggressive global business expansion

Starting from our launch into China in 1997, the Company has continued to expand overseas,

establishing production bases in Australia and the U.S.

■ Overseas net sales and market share (consolidated)

7,507 8,437

11,082 12,372

14,926

17,901

15,095

12,418

14,903 14,801

13,230

13.314.9

17.8 16.818.7

21.218.5

14.7 14.8 14.3 13.3

0

10

20

30

40

0

4,000

8,000

12,000

16,000

20,000

2003/ 3 2004/ 3 2005/ 3 2006/ 3 2007/ 3 2008/ 3 2009/ 3 2010/ 3 2011/ 3 2012/ 3 2013/ 3

Overseas　net　sales

Overseas　net　sales　share

(Million yen)(%)

[China] Entered market in 1997●1997: Established a joint venture company, Shenyang Shinagawa Glorious Metallurgy Materials Co., Ltd. (current Shenyang Shinagawa Metallurgy Materials Co., Ltd.) ●2003: Made an equity investment in a joint venture company,

Jinan Ludong Refractory Co., Ltd. ●2005: Established a joint venture company, Shinagawa

Rongyuan Refractories Co., Ltd.●2008: Established a joint venture company, Liaoning

Shinagawa Hefeng Metallurgical Material Co., Ltd.

[Australia] Entered market in 1998●1998: Established a joint venture general refractory company●2003: Fully consolidated the joint venture company and

renamed it Shinagawa Refractories Australasia Pty. Ltd.

[U.S.] Entered market in 2006●2006: Established Shinagawa Advanced Materials

Americas Inc. in Ohio


8. Current Status of the Expansion of Overseas Business Locations

Expanding overseas business locations in China, Oceania, and the Americas with a focus on areas close to the production sites of our customers

Jinan Ludong Refractory Co., Ltd.

Taiwan Liaison Office

North America Liaison Office

Shinagawa Refractories Australasia New Zealand Ltd.Overseas business sites

Overseas sales offices

(* indicates affiliated companies. All others are consolidated subsidiaries.)

*

Shenyang Shinagawa Metallurgy Materials Co., Ltd.

Shinagawa Rongyuan Refractories Co., Ltd.

Liaoning Shinagawa Hefeng Metallurgical Material Co., Ltd.

Shinagawa Refractories Australasia Pty. Ltd.

Shinagawa Advanced Materials Americas, Inc.


9. Domestic and Overseas Production System

North AmericaNorth AmericaChinaChina

AustraliaAustralia

[Overseas]After a review of the production system

subsequent to the merger, promoting the redevelopment of a steady supply system with

enhanced efficiency and speed

Overseas business sites of the Group

Developing a stable supply system by establishing the Group’s manufacturing sites

closer to customers in order to respond adaptively to customer needs

[Japan]

Ako・ Shaped refractories・ Monolithic refractories

・ Unfired bricks・ Shaped basic bricks・ Mold powder for continuous casting

Hinase

Tamashima・ Tap hole mix・ Monolithic refractories

Okayama・ Shaped refractories

Yumoto

・ Monolithic refractories・ Functional products for continuous casting

Kashima

・ Tap hole mix・ Monolithic refractories

(Since October 2010)


10. Global Procurement System

[China and North Korea area]●Magnesite●Flake graphite●Chromium ore, etc.

[South Africa area]●Chromium ore●Sillimanite●Zircon●Flake graphite, etc.

[Australia area]●Zircon●Magnesite

[India and Middle East area]●Chromium ore●Flake graphite, etc.

[Americas area]●Magnesite●Flake graphite●Dolomite●Bauxite, etc.

(South Africa, Zimbabwe)

(Ukraine, Iran, Oman, Pakistan, India, Sri Lanka)

(Canada, U.S.,Guyana, Brazil)

Specialty materials produced in Japan include silica, agalmatolite, etc.

The Company depends on foreign sources for approximately 60% of refractory materials, 80% or more of which (approximately 50% of the total raw materials) are imported from China.

Amid such circumstances, the Company developed a balanced procurement system to source materials from production centers in five geographical areas around the world from the perspective of avoiding excessive dependency on specific regions.

[Production centers of main imported materials]


Disclaimer

This document is intended to provide information on the results for the fiscal year ended March

2013 (April 2012 – March 2013) and is not intended to solicit investment in securities issued by

the Company.

The document was prepared based on data available as of June 10, 2013. Opinions,

forecasts, etc. described herein are based on the Company’s judgment at the time of the

preparation of the document. The Company does not warrant or guarantee the accuracy or

completeness of the information contained herein, and such information may change without

notice in the future.


42



June 10, 2013June 10, 2013

Securities Code Number: 5351

― Supporting the World’s Key Industries Through Technologies ―

Shinagawa Refractories― Supporting the World’s Key Industries Through Technologies ―

Shinagawa Refractories

presentation material on results for fiscal year ended march 2013

Documents