Nippon Steel Expands Presence in Brazil through USIMINAS

Nippon Steel announced on Monday the firm acquires 1.7% share in Usinas Sider?rgicas de Minas Gerais S.A. (USIMINAS). Nippon Steel signed 15 years shareholders agreement with major shareholders of USIMINAS to join the controlling shareholders’ group. Nippon Steel tries to expand the presence in Brazil, where steel demand increases for automotive flat steel and other high grade products and steel makers have world top class of cost competitiveness, for global no.1 supplier focusing on medium-high grade steels. The managing director Yuki Iriyama of Nippon Steel said at press conference the firm joins management of USIMINAS with responsibility as the only steel maker in the controlling shareholders. He said Nippon Steel can share strategy with USIMINAS, which tries to improve the supply ability of high grade steel products, and expects synergy under the cooperation. He said Nippon Steel decided to expand the relationship with USIMINAS to expand the presence in Brazilian high grade steel market where automobile output is expected to grow to annual 3 million units from current 2.6 million unit. Mr. Iriyama said USIMINAS seeks Nippon Steel’s technical support to study for new slab making steel works. USIMINAS will seek reliable partner for the slab project for risk management. Mr. Iriyama said Nippon Steel could join the new slab plant project depending on the outcome of USIMINAS’ study and other conditions. He indicated Nippon Steel needs access to the country with world lowest cost for steel making for global strategy. Nippon Steel and USIMINAS operate automotive galvanizing steel making joint venture, UNIGAL in Brazil, which has 100% share for local transplants of Japanese automakers. Nippon Steel tries to serve for high grade steel users in Brazil, where steel makers including Arcelor Mittal compete in high valued steel market including automotive flat steel.