Japan: The New No. 3 in Steel

Even in the age of the atom, steel is still the vital measure of industrial might. The Soviet Union has made it national policy to catch up with U.S. steel production, the world's largest, and the other large steel producing nations never cease jockeying for advantage. Since World War II, no nation has reached for big steel status with more success than Japan, whose industry is among the world's most advanced and whose exports have raised the ire of competitors in both the U.S. and Europe. Now Japan has taken over from West Germany as the world's third largest producer, having turned out 34 million tons of high quality steel in the fiscal year that ended in March v. 33 million tons for the Germans.

From southern Kyushu to northern Honshu, the classic brush-painting coastline of Japan has been transformed into dynamic montages of modern wealth. Fire and smoke belch forth from towering blast furnaces that gobble up a steady stream of coal, iron ore and limestone from huge supertankers. The Japanese take second place to no one as owners of the most modern steelmaking equipment, have 14 ore-to-ingot plants operating at nearly 95% of capacity and another four being built. Japan ranks second to the U.S. in up-to-date strip-mill capacity and produces 38% of its steel by the speedy, economical oxygen process, while only 10% of U.S. steel is made that way.

Unexpected Boom. The American occupation triggered the modernization of Japan's steelmaking. Occupation planners declared the steel industry essential, thus enabling it to progress from a complete halt in production on V-J day to an output of 6,000,000 tons by 1951, when the peace treaty was signed. At the same time, the old government monopoly, Japan Steel & Iron Co., was broken up into Yawata Iron & Steel Co. and Fuji Iron & Steel Co., currently Japan's two largest producers. Encouraged by the authorities, competition flourished; today Japan has 62 steelmakers. But 55% of production is still accounted for by the nation's big four, who are rounded out by Nihon Kokan and Kawasaki Steel.

The man who took the lead in advocating modernization is now the acknowledged leader of the Japanese steel industry: Shigeo Nagano, 64, Fuji's president. The son of a Buddhist priest and himself a Judo expert with a reputation for forcefulness, Nagano pressed for renovation and expansion of the industry despite official reluctance and occasional opposition from financial circles, who could not see so clearly as he the role steel would play in reconstruction. Following his lead, the industry inaugurated a $358 million, five-year capital expansion program in 1951. Japan's accelerated recovery, and the shipbuilding and railroad booms it brought, dwarfed even the most optimistic projections. Steelmen put $1.9 billion into a second five-year plan that doubled production, and in 1961 launched a third plan that will cost $3 billion, bring production to 42 million tons by the end of 1966.