Nippon Steel to Expand Soft Alliance Network

Nippon Steel’s president Akio Mimura said the firm tries to expand the partnership with the domestic and offshore partner in the context of soft alliance network. The firm tries to seek the profit growth in expansion of offshore upstream and downstream operation through the alliance while the firm improves the supply ability of high grade steel products in Japan. The firm tries to follow the growing market through potential new operation in India and Vietnam. Mr. Mimura said the firm tries to expand the partnership with Sumitomo Metal Industries and Kobe Steel for common merit. He said the tie-up on energy and environmental issues are appropriate to cooperate with alliance partners in joint venture for steel dust recycling. Nippon Steel also tries to seek further partnership with POSCO in dust recycling joint venture and potential further cooperation including downstream operation in Vietnam. Mr. Mimura said the firm is in study for continuous galvanizing line at Siam United Steel, which is cold rolling joint venture with POSCO. Mr. Mimura said Nippon Steel, Baosteel Group and Arcelor Mittal will decide the expansion of the joint venture, Baosteel-NSC/Arcelor Automotive Steel Sheet in December to add new hot-dip galvanizing line. He said the firm also expands the cooperation with Baosteel into environmental issues including dust recycling business. Mr. Mimura said the firm is in talk with Tata Steel to launch cold rolling joint venture in India to supply high quality cold rolled sheet steel for local automobile industry. He indicated the firm could build hot-dip galvanizing line in India when Indian automakers expand the operation for export market. Mr. Mimura said the firm is still talk with Arcelor Mittal for revised alliance agreement based on old contract with Arcelor through 2011. He indicated the agreement could delay to December or later when they still study for expansion of hot-dip galvanizing operation at North American joint venture. Mr. Mimura concerns domestic construction steel demand could decrease by 2 million tonnes in October-March period due to very slow building activity when building start dropped by 40-50% in August and September from a year earlier. The firm tries to reduce the output for the market and to ship more for export market. Mr. Mimura expects the firm could post record consolidated recurring profit at 600 billion yen for the year ending March 2008 despite of the slower domestic market.