INTERVIEW-UPDATE 1-Japan Steel: better signs for some operations
* Demand for injection moulding machines bottomed out
* Aims to export wind turbine systems in 2011
* Stock closes down after news but outperforms steel subindex
By Yuko Inoue
TOKYO, June 23 (Reuters) - Japan Steel Works Ltd (5631.T) said its plastic machinery business is emerging from the worst of an industry slump, while solid demand for its core nuclear power parts business may lift profits in the next financial year.
A plunge in sales of clad steel pipes and plastic injection machinery amid the global economic crisis has more than outweighed robust sales of nuclear power components, leading Japan Steel to forecast its first profit decline in eight years this financial year.
President Masahisa Nagata told Reuters in an interview the company expects to win a clad pipe order worth around 10 billion yen ($100 million) from an oil major which will be used in a liquid natural gas project in Australia.
He also said demand for injection moulding machines bottomed out in the January-March quarter helped by an improvement in economic prospects and an economic stimulus package in China.
"Inquiries about our injection moulding machines have risen about 10-20 percent in the current quarter from the preceding quarter," Nagata said.
"A rise in orders of injection moulding machines is typically a sign of a future upturn in orders for extruders and other machines used by upstream machinery makers," he said.
An extruder is a machine that produces lengths of plastic sections.
Nagata said the company hopes operating profit will grow in the year to March 2011, after an expected 24 percent fall to 28 billion yen this financial year.
That profit decline is, however, much smaller than its peer steel and machinery makers thanks to its profitable nuclear reactor parts business.
The company is the world's top supplier of nuclear reactor lids, reactor pressure vessels and steam generators. A lack of production capacity has caused delays in some nuclear power projects in China in recent years.
Nagata also said the company plans to start exporting its wind power generation systems in 2011.
Shares in Japan Steel Works rose briefly after the interview before closing down 2.2 percent at 1,146 yen, although they still outperformed a 3.8 percent decline for the steel subindex .ISTEL.T.
(Editing by Edwina Gibbs)
((yuko.inoue@thomsonreuters.com; +81-3-6411-1815; Reuters Messaging; yuko.inoue.reuters.com@reuters.net))
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($1=95.11 Yen) Keywords: JAPAN STEEL WORKS/
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