JFE Steel, Dongkuk to Agree for Further Tie-up

JFE Steel announced on Monday the firm and Dongkuk Steel Mill agreed to strengthen the partnership. JFE will support Dongkuk to build new plate mill while JFE keeps providing slab for high valued plate and technology to make high valued plate. JFE increases the interest in Dongkuk, which becomes equity method affiliate of JFE, while Dongkuk purchases 10 billion yen of share of JFE Holdings to improve the partnership. They try to expand the plate supply as total in their groups by improving the partnership to meet demand for high valued plate in South Korea. They will sign contact in the year after detailed talk including JFE’s slab supply volume, which is annual 1 million tonnes. They keep discussing for slab supply when JFE has limited capacity to ship more slab under tight steel source while Dongkuk needs more slab when the firm builds new plate mill. JFE increases the interest in Dongkuk from current 4.1% to 15% after the firm purchases Dongkuk’s own holding share for 15-20 billion yen. JFE keeps sending director for Dongkuk. Dongkuk will purchase 5 billion yen of JFE Holdings” share by the end of September 2007 at the first. Dongkuk announced on Monday the firm builds new plate mill with 1.5 million tonnes of annual output capacity in Dangjin for 760 billion won. The firm finishes the construction of the mill to make high valued plate for shipbuilders and line pipe. The firm tries to shift high valued products with technical support by JFE and own steel source from slab making plant in Brazil. Former Kawasaki Steel entered into partnership with Dongkuk in July 1999. JFE holds share of Dongkuk and supplies technology and slab for Dongkuk. They singed 3-year contract under which JFE provided annual 1 million tonnes of slab for plate.