Mr. Patrick Buffet, Chairman and Chief Executive Officer (CEO) of ERAMET, France who visited Japan had a press interview at Hotel Okura located in Minato-Ward, Tokyo on July 2, and announced the Company's activity in 2014 and the outlook for its future transaction as follows.

As to the Group's business results in 2014, albeit the sales amount was down from the prior year, but the business profit moved into the black.

As to the Manganese Division, the ore production volume was down by 5% from the prior year owing to the railway accident, and the drop in the ore price made our profit reduced. On the one hand, the production volume of nickel was up by 4% from the prior year, and the decreased business loss contributed a lot to the group's business profit moving into the black. Division-wise activities and outlooks are as follows.

 

(1)Nickel Division:

1.LME nickel price made a recovery in the former half owing to Indonesia's export ban on nickel ore. However, it turned out that there was a large lot of hidden stock found in China in the latter half, which made the price pushed down again.

2.In the former half of 2015, albeit the way for the price to make a recovery was prepared by the increased worldwide consumption and decreased nickel production, the price has yet to make a recovery because the weak macro economy wore down the investors' motivation, and the recovery in the price has yet to be materialized.

3.ERAMET carried out the plan to make a thorough cost reduction in 2014, and improved the business result.

4.The production in New Caledonia increased to 55,000 tons.

5.As to Weda Bay Nickel Project (Indonesia), all the partners agreed to put off until the economy is improved enough and the results of discussion with the Government of Indonesia to complete the framework of regula tions and finances become available.

(2)Special Steel Alloy Division:

1.The ferroalloy, ML340 has been nominated to be awarded by Safran Group. It has been decided that this will be used for Boeing 737 Max.

2. 10,000-ton press machine has been installed at SQuAD, a joint venture company in India.

3.The sale of Pearl Micro Powder has started in Japan for use in laminated structure.

4.Eco Titanium Plant as a recycle plant meeting the airplane grade of titanium has started operation.

5.The sale of ASP has started in the markets for cold-rolled processing in Asia including Japan by using a new wholesale route.

6.Erasteel continues to develop powder ASP for high-speed steel tools and Pearl micro powder for metallic powder.

7.The activity is expanding also in the recycle field.

8.The supply chain has been adapted to comply with the customers' expectation for demand, and the service has been improved and enhanced.

(3)Manganese Division:

1.In 2014, the world production volume of crude steel was up by 1% from the prior year. But, the settlement of accounts finished in the profit fall due to a price drop in the manganese ore.

2.COMILOG's production of manganese ore was 3.5 million tons due to the railway accident, down by 200,000 tons from the prior year.

3.In 2015, the transportation capacity is projected to be strengthened by way of upgrading railway facilities and increasing wagons, and 4 million-ton production system is aimed to be achieved at an early date.

4.Moanda Metallurgical Complex started production of silico manganese in August 2014, and is scheduled to

start production of manganese metal in the former half of 2015.

5.Mineral Sand (Titanium oxide pigment, Zircon): The development of Grande Cote Deposit started in 2014, and

the production is now about to start at the site.

6.The study on Maboumine project which develops a multi-metal deposit containing rare earth, niobium and tantalum is ongoing.

(4)Outlook:

1.Supposing the economic conditions at the beginning of 2015 such as currency exchange and oil continue as they are, the positive effect for this year's business result is expected.

2.However, the drastic drop in the prices of nickel and manganese ore in the period from April to June became an unavoidable burden on the business result in the former half (January - June).

3.The experts predict the nickel price will make a recovery by the end of 2015.

4.The ferroalloy division predicts it is likely that there will be a slowdown in some of the projects by the end of 2015. However, there will be benefits continuously owing to strong demand from the aerospace industry.

5.ERAMET Group will continue its plan to have a large-scale cost curtailment amounting to a total of EUR360 million and upgrade the productivity during 2014 to 2017.

6.In 2015, the Group aims at a level of capital expenditure of being far below EUR400 million as is the case in the prior year.

7.In the several years to come, the Group will have benefits from implementation of modernization and the investment in the enhancement of productivity which were carried out in the past.

• [Editor:Sophie]