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Nippon Steel to Partner with Posco on New Cold-Rolling Mill in Vietnam
02/02/2009 - Nippon Steel and Posco will convert Posco’s new cold-rolling mill currently under construction in Vietnam into a joint venture company between them.
Nippon Steel Corp. and Posco have announced they will enter into a joint venture agreement to convert Posco’s new cold-rolling mill currently under construction in Vietnam into a joint venture company between them.
The decision to form the joint venture is the result of a joint study the companies had initiated last October on Nippon Steel’s participation in the Vietnam cold-rolling mill. Nippon Steel, which is to invest around US$37 million, will acquire a 15% equity ownership in Posco-Vietnam Co., Ltd. Posco-Vietnam, which is constructing the new cold-rolling mill, is currently 100% owned by Posco.
The new complex will feature a 1.2 million tonnes/year pickling line and tandem cold rolling mill as well as a 0.7 million tons/year continuous annealing line. Posco and Nippon Steel will supply the venture with hot rolled coils in accordance with their equity percentages. Commissioning of the new complex is scheduled for September 2009.
Nippon Steel and Posco, which originally entered into their strategic alliance and mutual shareholding in August 2000, have continued to develop various cooperative measures under the agreement. In October 2006, they agreed to enhance their strategic alliance through such measures as mutual supply of steel slabs and the addition of mutual share purchases of ¥55 billion for each. 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. In December 2008, the companies acquired interest in Brazilian iron mine as a part of consortium of Japanese and Korean companies.
Both companies intend to continue to further enhance their strategic alliance, holding sights firmly on developments in the global steel market environment. Both companies are confident that this strategic alliance will contribute to the further growth and development of the two companies.
