METI Warns Japan Steel Makers’ Technology Assets Security

Japanese Ministry of Economy, Trade and Industry tries to protect Japanese steel makers’ right for advanced technology when the makers expand technical partnership activities with offshore companies. METI especially focuses on world top class technology of Japanese special steel makers. METI warns Japanese steel makers should be cautious in such technical partnership or they would lose the technical advantage, which is core competence for Japanese makers in longer term.

Japanese steel makers expand the offshore activity in rolling and processing operations in China and Southeast Asia to meet growing demand from transplants of Japanese automakers and appliances makers. Japanese steels rapidly expand the alliance with Indian makers recently.

Japanese special steel makers export the products and were reluctant to build major plants in offshore countries. Sumitomo Metals (Kokura) agreed with Jiangyin Xingcheng Special Steel of China for technical alliance of special steel bar and wire rod in 2002. Mitsubishi Steel Mfg. announced in June the technical support to Indonesian electric furnace steel maker, PT. Jatim Taman Steel Mfg. for semi-finished steel making. Daido Steel signed technical support agreement with Sunflag Iron & Steel of India on November 4, which is the first alliance with Indian maker as Japanese special steel maker.

METI expects Japanese steel makers limit such technology related alliance with offshore companies in terms of leakage of advanced technology while Japanese steel makers have contracts with the offshore partners to limit the alliance areas. METI will discuss the issue with domestic steel makers as common issue for security of technology related property.

Japanese steel makers are forced to compete with offshore steel makers in severer than before. Japanese makers seek future growth by expanding offshore activity especially under extremely higher yen rate condition. The makers will have more offshore plants and alliances with offshore partners.