Mitsui & Co., Arcelor to Build Automotive Steel Center in South Africa

Mitsui & Co. announced on Tuesday the firm signed agreement with Arcelor of Luxemburg to establish steel processing service joint venture for automotive steel in South Africa for 31 million euro. They will start the operation in first half of 2007 providing annual 120,000 tonnes of steel and just in time delivery service for local auto- and parts-makers. The center is to become the service center in the country where European and Japanese automakers are expected to expand operations as automobile export base. Mitsui & Co. tries to expand the partnership with Arcelor, which has big presence in Europe and South America, and keeps talk second joint venture. Arcelor controls 65% of the Durban based JV, AMSA Steel Service Center with 7.75 million euro. Mitsui & Co. has 35% interest in the JV. The JV provides steel processing services including slitting, cutting and blanking along with inventory function. The firm with know how from the parent firms provides services including quality control and delivery. Mitsui & Co. deals Arcelor’s steel products for automobile and other applications through service centers in UK and Czech. The joint venture is the first with European steel maker for Mitsui. The firm with know how for international logistics, processing and delivery service for high valued steel products will expand the relationship with Arcelor talking for second venture in other areas. Arcelor has alliance with Nippon Steel for automotive flat steel and provides high valued steel products as Japan for European operations of Japanese automakers. The firm acquired Dofasco of Canada and started operation of automotive hot-dip galvanizing steel JV in Russia. The firm would increase the presence as one of the several steel makers for high-valued automotive steel when Japanese automakers expand the operations from South Africa to Eastern Europe and Russia.