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Nippon Steel, Posco to Explore Shareholding in Vietnamese Cold Mill

11/04/2008 - Nippon Steel and Posco will conduct a joint study on Nippon Steel’s potential participation in Posco’s new cold-rolling mill currently under construction in Vietnam.

Nippon Steel Corp. and Posco have commenced a joint study on Nippon Steel’s participation in Posco’s new cold-rolling mill currently under construction in Vietnam.
 
The joint study is a further expansion of the strategic alliance that has existed between the companies since August 2000 when they signed an agreement on strategic alliance and mutual shareholding.

The companies previously enhanced their strategic alliance in October 2006 with additional mutual share purchases valued at 55 billion for each. The companies have since implemented specific additional measures, such as mutual supply of steel slabs.

In October 2007, the companies entered into definitive agreements to establish a joint venture company regarding DRI (direct reduced iron) supply for both companies as well as dry-dust recycling. The companies have also co-invested in a cold rolling mill in Thailand, operated by The Siam United Steel (1995) Co., Ltd.

Posco’s new cold rolling mill in Vietnam—Posco-Vietnam Co., Ltd.—was established in November 2006. Located in the Southern part of Vietnam, the facility is being built at a total investment of approximately ￥52.8 billion.

Currently 100% owned by Posco, the facility comprises a 1.2 million tons/year tandem cold-rolling mill and a 0.7 million tons/year continuous annealing line. The joint study will evaluate the potential for Nippon Steel shareholding in the range of approximate 10 to 20%

The new cold rolling mill is scheduled to be commissioned in September 2009.