Nippon Steel Strikes New Shareholders Agreement for Usiminas

Nippon Steel announced on Friday the firm entered into new shareholders agreement about Usiminas, Brazilian major steel maker, with Usiminas, Mitsubishi Corporation, Metal One, Votorantim and Camargo. They announce early ending of existing agreement in November 2016 to employee pension fund of Usiminas, and make the transition from existing agreement to new agreement for next 15 years. Nippon Steel continues to manage Usiminas as an only integrated steel maker among the shareholders. They aim to enhance administrative organization, speed up managing determination and raise Usiminas’ corporative value.

Usiminas’ voting power ratio of equity shareholders is 63.9% at the moment while changes to 53.7% by disjunction of annuity fund after November 2016. Agreed shareholders of Japanese companies, Votorantim and Camargo have majority of the shares. They can extent the new agreement every five years after cutoff point of November 2031.

Nippon Steel supposed new shareholders agreement was necessary for Usiminas when business competition becomes severer than ever due to the increase of Brazil’s steel product import and capacity expansion by other Brazilian competitors under strong real exchange rate. Nippon Steel aims to enhance competitive power of Usiminas by expansion of upstream processes in the existing steel plant.

Usiminas started operation of acceleration cooling system for plate mill in Ipatinga iron works in 2010, and plans to start operation of no.2 hot dip galvanizing line in UNIGAL, a joint company of Nippon Steel and Usiminas, in March 2011. Usiminas starts no.3 vacuum degassing equipment for July-September 2011 in Ipatinga iron works, and no.2 hot rolling mill for July-September in Cubaton iron works as well as no.3 pickling line for October-December 2011.

The next proposition is stable procurement of raw materials along capacity expansion for high grade steel products.