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September, 2008

COVER STORY

Japanese Technology for the World.

Armed with environmental technology honed through the experience of environmental pollution and past oil shocks, Japan adds considerable strength to the international community's battle with global warming. The Japan Journal zooms in on some of the corporations, governmental bodies and private organizations currently pursuing business and providing aid to other nations in, respectively, the fields of energy conservation, environmental education, emissions reduction and renewable energy.

Nippon Steel Engineering Co. is a member of the Nippon Steel Corporation group, a major Japanese steel company. In May of 2007, Nippon Steel Engineering entered into a contract to provide energy conservation and environment equipment to Chinese steel maker Shougang Jingtang Iron and Steel, a steel mill with a steel production capacity of eight million tons built on the coast of Hebei Province. Once the plant is finished, a CDQ (coke dry quenching equipment) system having the largest processing capacity in the world will come on line.

The CDQ is an energy-conservation system installed on a coke oven. It is the representative energy-saving technology being adopted in the steelmaking process. In a CDQ system, inert gas is used instead of water to cool high temperature coke, thus making it possible to save water. Also, the heat expended in the process of cooling can be used to generate electricity. The cooling tower, moreover, is sealed, making it possible to prevent the release of fine particles. It is the most advanced system in the world leveraging both the effect of energy conservation and environmental protection measures.

It took more than a year and a half for both sides to reach agreement on the introduction of the world's largest CDQ system. The Chinese side hesitated before deciding to employ a system of such unprecedented scale.

Masuda Shui chi works in the Overseas Marketing Department at Nippon Steel Engineering. "Chinese companies wanted an advanced and stable system, and we proposed the world's largest CDQ system. Although they agreed the system was advanced, they initially balked, saying it wasn't stable. We then built a new experimental unit and invited the Chinese customer to Japan to see it in action. From a sales point of view, this was the biggest factor in bringing about the contract."

Nippon Steel Engineering's CDQ business got started in the 1970s, when it introduced the base technology from a Ukrainian maker. Subsequently the company continued development work with a view to increasing processing capacity, and in 1976, brought Japan's first CDQ facility on line at its Yawata Steel Works in Kitakyushu. In the 1980s, installations within Japan rapidly increased, such that nearly all coke ovens now use the CDQ system. Processing capacity has also increased four-to five-fold, bringing the world's most advanced system into being.

Growing CDQ Business

CDQ systems are proliferating not just in Japan but also in China, where the rush to build steel mills is continuing.

The first company to adopt Nippon Steel Engineering's CDQ system in China was Shanghai's Baoshan Iron and Steel, which began as a huge national project when construction on the plant was launched in 1978. CDQ systems were then installed at Shougang Iron and Steel in 2001, Wuhan Iron and Steel in 2003 and at Shougang Iron and Steel's No. 2 plant in 2004. In 2005, the Chinese government made the installation of CDQ systems compulsory for all new coke ovens.

"In a sense," says Masuda, "you could say that the high regard given the track record we built up in CDQ systems was related to the imposition of the regulations. That meant a big business opportunity for us."

Meanwhile, rival Chinese companies sprang up in China and showed a determination to catch up by leveraging geographical advantages. Together with a local design company, Nippon Steel Engineering incorporated Beijing JC Energy & Environment Engineering Company (BJCEEE) in 2003 as a joint venture. The aim of BJCEEE was to contract for entire projects beginning from initial construction, to boost quality and strengthen differentiation and competitiveness. The company is working to consolidate its position in the rapidly growing Chinese market.

In addition to China, Nippon Steel Engineering's CDQ market is growing in Brazil, Germany, and notably in India, which ranks fifth in the world in steel production volume and is experiencing rapid growth.

"CDQ is a system which has a tremendous energy-saving impact," notes Masuda confidently. "The CDQ system is said to account for about twenty percent of the energy-savings at the steel plant overall. Demand for the system is continuing to rise owing to the skyrocketing cost of energy."