Nippon Steel Forms Strategic Alliance with Chubu Steel Plate

Nippon Steel announced on Tuesday the firm forms a strategic alliance including business and capital with Chubu Steel Plate, Japanese electric furnace maker. Both companies are working together closely for consignment production of the steel sheet or executive dispatch. Kiichiro Masuda, managing director of Nippon Steel, said strategic communication is the first. Both companies will set alliance exploratory committee by both companies’ members, which kick around concrete plan. Nippon Steel takes over the allocation of new shares to a third party from Chubu Steel Plate, which raises the share rate to about 5% from 0.5%. Nippon Steel becomes biggest shareholder which has the share about 9% of Chubu Steel Plate including Nippon Steel group, Nittetsu Shoji’s share. Alliance items is effective utilization of both companies production equipment including the consignment production of each steel products, the cooperation of the cost reduction which the repairing of the production equipment, the raw procurement and the steel products distribution. Nippon Steel will cooperate in engineering for Chubu Steel Plate’s rolling mill improvement. Nippon Steel is entrusting the production at about 3,000 tonnes per month to Chubu steel Plate. Mr., Masuda said both companies mull to increase the entrustment of the production to 5,000-10,000 tonnes per month. Nippon Steel will build up the competition power by the allocation of the production with users or the group buying of raw material with Nippon Steel’s Nagoya iron works and Chubu Steel Plate.