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RATIONALISATION FOR JAPAN'S STEEL INDUSTRY. 26. Owing to a widespread feeling that the haphazard develop- ment during the War and in the boom years that followed has caused production to be unbalanced, and the manifest weakness of Japan's steel industry in competition with other nations, a plan for a nation-wide merger to include the Government Steel Works at Yawata and private companies was started by a Government Committee report in 1925, and is still under active discussion. The project is to form a private company, the shares of which will be paid for in kind, the assets of each amalgamated company being valued by a special valuation committee. It is proposed to concentrate bulk manufacturing of sections and rails at the Yawata Steel Works, and to manufacture other lines in the works which are at present privately owned. Great difficulties arise in obtain- ing a correct valuation owing to the lack of specialisation prevalent throughout the Japanese steel industry, and to its diversification in numerous side lines. The private steel works complain that the Yawata Steel Works are extravagantly laid out and have excessive overhead charges.
THE GOVERNMENT STEEL WORKS.
27. The Yawata factory is large and well equipped, with ample railway and motor transport facilities. Internally it has a very full equipment of railways, conveyors and transporters. The offices are handsome and spacious. There is a big private printing works. A modern laboratory of great size is nearing completion, and will take the place of a smaller one at present in the works. Construc-
tion work is entirely of local material-reinforcement, cement and bricks being made in various departments.
The power supply consists of four 1,000 h.p., one 1,800 h.p. and one 3,000 h.p. gas engines, working quite well on blast furnace gas.
In addition, a 20,000 k.w. turbo-alternator of Japanese manufacture is installed.
The plant was erected in three stages-30 years ago, 12 years ago, and four years ago. The old plant included eight 250-ton blast furnaces and 12 steel mixers and furnaces of 60 tons capacity, with plate, bar and section mills suitable to the output, mostly German. The first extension was American, and included two additional blast furnaces, a mixer of 230 tons capacity and six furnaces of 60 tons capacity. The variety of plates and sections was increased, the latter going up to 24-in. joists. The most recent extension included four large 500-ton blast furnaces, a 300- ton Talbot mixer, and two 300-ton furnaces, also six 70-ton furnaces, additional bar and section mills of modern type, and a capacious sheet mill for black sheets and tinned plate. The equip- ment also includes a good wire making plant.
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The operatives appeared to be efficient, clean and cheerful. The factory, at the time of our inspection, was running very light, say, 50 per cent., and considerable stocks were in hand. A number of mills were under repair or standing; their physical condition was
poor.
The welfare arrangements included a good club, with mess-room, libraries, canteens, baths, etc., every convenience being very cheap. The club was well patronised. Elementary and technical schools, housing schemes, and recreation grounds were also in evidence. The technical school originally designed for training apprentices is now being diverted to training foremen for other factories.
The large private works are more conservatively equipped, and where they have specialised are making good progress. In par- ticular in black sheet the Fukiai Works are turning out a good product economically, and among the factories and mills visited were exceptionally busy.
FUTURE OUTLOOK.
28. As the fundamental idea of the iron and steel merger scheme is to bring up the productive capacity in each direction in which it is now necessary to import, and as over-production is already noticed in many lines, it would seem that steel importers will find it very difficult to secure any but low price orders, and then only in the lines in which Japan is producing short.
It will be in these same lines that a market may open for import
in case of any considerable revival of trade.
But to take advantage of any such openings it will be essential to have an expert watching for the right moment at which to bring sales pressure to bear.
Where Great Britain still secures trade, as in tinplates, special steels and ships' sections, close touch with the actual buyer and close regard for his exact requirements are very necessary, as only thus will there be a reasonable chance of participating in any expansion. The market for iron and steel manufactures in Japan is, however, and will always be, a difficult one for importers. Poor prices will prevail and quantities of imports will be governed by Japanese production.
MACHINERY.
29. The market for machinery in Japan is subject to many of the same factors as that for iron and steel, but has also difficulties as well as hopeful points of its own.
The desire to support home industry and the well-known imitativeness of the Japanese, bring about intense domestic com- petition in almost every line of engineering. Large firms and small firms seem prepared to make anything or everything, regard- less of their ability to make it well or economically. Attempts
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