$350bn investment in new casting equipment to ease production bottleneck JFE Steel.

TOKYO — JFE Steel plans to bring new continuous casting equipment online in Japan by the latter half of fiscal 2020, giving it greater freedom to raise crude steel output.

The roughly 40 billion yen ($354 million) investment at the Kurashiki section of its West Japan Works will increase crude steel production capacity by around 2 million tons annually if run at full capacity, the JFE Holdings unit said Thursday.

The section’s current production capacity has not been disclosed, but it produced around 8.8 million tons of crude steel in fiscal 2016.

Continuous casting equipment turns a mixture of molten metal from a blast furnace, steel scraps and additives into slab steel, which can then be processed into finished steel products.

JFE’s blast furnace capacity currently outstrips that of its casting facilities. Making upstream operations such as casting more productive will help the company increase output more flexibly in response to demand shifts. The new equipment is also meant to boost JFE’s ability to compete on cost and quality.

JFE is working quickly to strengthen its Japanese production base. The Tokyo-based steelmaker said Dec. 7 that it will invest around 27 billion yen to upgrade a coke oven at the western works’ Fukuyama section. It moved up the decision on the casting equipment investment, which had initially been considered for fiscal 2018 or beyond.