Japan's Nippon Steel & Sumitomo Metal Corp said on Tuesday that it will shut a blast furnace and spend 1.35 trillion yen ($11 billion) to upgrade facilities in Japan over the next three years in a bid to bolster its competitiveness.

The hefty capital expenditure plan comes after its Nagoya plant in central Japan, built in 1958 and producing 15 per cent of the company's total steel output, has suffered a series of problems including power failures, smoke releases and a fire.

"Given the fact that some of our main steel plants have been in use for over 40 years, we've decided to reinforce and revive these facilities," Nippon Steel President Kosei Shindo told a news conference on the company's new three-year business plan.

To help improve safety at these plants, the company plans to nearly double its annual hiring to 1,300 during the 2015-2017 fiscal years, up from 700 a year in the past two years.

Nippon Steel, the world's second-biggest steelmaker by crude steel output, also plans to shut a blast furnace in Kokura, western Japan, at the end of the 2018 fiscal year, it said.

After the Kokura closure by end-March 2019, it will have a total of 12 blast furnaces running in Japan, but its overall crude steel production will remain at around 50 million tonnes a year as other plants will boost output, the company said.

Under the new business plan starting in April, Nippon Steel aims to raise its return on equity (ROE) to over 10 percent in the 2017 fiscal year, up from an estimated 6-7 per cent in 2014.

In addition to the 1.35 trillion yen investment, Nippon Steel plans to spend 300 billion yen on business expansion, mainly for overseas operations.

The company aims to boost its profit from overseas units by 50 billion yen a year in the 2017 fiscal year from 15 billion yen planned for this year.

In an effort to boost shareholder return, the company will raise its payout ratio target to 20-30 per cent from the current 20 per cent, it said.

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