Nippon Steel, Ternium to Build Galvanizing Line in Mexico

Nippon Steel announced on Tuesday the firm signed non-biding memorandum of understanding with Ternium to form galvanizing steel joint venture in Mexico. They will reach definitive agreement after the talk including feasibility study. They build continuous galvanizing line with 400,000 tonnes of annual output capacity for US$ 350 million in around 2 and half years. They establish high valued automotive flat steel making base to serve local transplants of Japanese and other automakers in the growing market. Nippon Steel tries to expand the presence through the local production base after agreed Indian joint venture.

Nippon Steel supplies hot rolled flat steel to Ternium and Nippon Steel decided to follow the growing market of Mexico with the reliance partner. They try to reach definitive agreement ant to realize the plan to build the new line after the talk including due diligence, feasibility study, authority’s approval and each company’s approval.

They build new continuous galvanizing line with state of the art technology as Nippon Steel’s Japanese facilities in vicinity of Monterrey city. The joint venture will make high valued galvannealed flat steel including automotive outer panel and high tensile steel to serve local users.

Many world major automakers including Toyota Motor, Nissan Motor and Honda Motor have production sites. The demand is recovering from the financial crisis faster than other areas. The automobile production is expected to increase to 2.8 million units in 2015 from 2.1 million units in 2008. Nippon Steel expects the galvanizing steel demand will increase to 1 million tonnes per year in 2015.

Luxemburg based Ternium produces around 9 million tonnes of steel at main facility in Mexico and Argentina. The firm provides flat and long steel products to automobile, appliances and other major users.