Nippon Steel to Acquire Majority in Malaysia EG Maker

Nippon Steel announced on Thursday the firm started talk with Tatt Giap Group of Malaysia, which is largest shareholder of Malaysian electrogalvanized steel maker, Nippon EGalv Steel, to acquire majority of Nippon EGalv Steel. Nippon Steel, which already has 10% share in Nippon EGalv Steel, tries to control majority to provide license when Nippon EGalv Steel starts production of anti-fingerprint grade electrogalvanized steel for appliances.

Nippon Steel and Tatt Giap Group agreed to transfer shares of Nippon EGalv Steel to increase corporate value of Nippon EGalv Steel under control and technical support of Nippon Steel. They will conclude the deal for share transfer in late June. Nippon Steel will send several persons including president and engineers to Nippon EGalv Steel when the firm controls the majority. Japanese major steel trading firm, Hanwa Co., which has 15% shares of Nippon EGalv Steel, will increase the shareholding to 22.78%.

Electrogalvized steel demand in Malaysia consumes around 300,000 tonnes including 200,000 tonnes for electric appliance and 100,000 tonnes for construction material. Japanese electric companies have a number of transplants for flat panel television and audio equipments in Malaysia. Nippon Steel has exported several tens of thousands tonnes of electrogalvanized steel. Nippon Steel tries to improve the customer service by controlling majority of Nippon EGalv Steel when the users prefer to local steel procurement while local electrogalvanized steel maker, POSCO-Malaysia has annual 180,000 tonnes of output capacity.

Tatt Giap Group, which has electrogalvanizing steel plant, cold finished bar plant, carbon steel flat products and stainless processing operations in Malaysia, established Nippon EGalv Steel in January 2006. Nippon EGalv Steel with 25 million ringgits of capital has an ectrogalvanizing line with annual 150,000 tonnes of output capacity at the plant with around 40,000 square meters of space, which started production of construction grade electrogalvanized steel in February 2009. Nippon Steel, which has long time relationship with Tatt Giap Group, participated in Nippon EGalv Steel in February 2010. Nippon Steel has supplied material of electrogalvanized steel and technical support for ainti-finger print steel to Nippon EGalv Steel.

After the share transfer, Nippon Steel has 50.1% in Nippon EGalv Steel. Nippon Steel expects 500-600 million yen for the additional share purchase. Tatt Giap Group has 27.12% share and Hanwa Co. has 22.78% in Nippon EGalv Steel.