Nisshin Steel Increases Ownership in Acerinox
02/05/2009 - Nisshin Steel acquires an additional 9,359,000 shares of Spanish stainless steel producer Acerinox, increasing its ownership percentage to 15.0% from the previous 11.3%.
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Based on the expectation of continuously growing stainless demand in Malaysia and surrounding countries, joint venture partners Nisshin Steel and Acerinox are proceeding with plant construction in order to launch commercial production in 2011 as originally scheduled.
The joint venture—Bahru Stainless SDN BHD—will start as a cold rolled stainless steel sheet re-roller, with equipment comprising a 180,000 tonnes/year cold rolling mill and a 240,000 tonnes/year hot/cold annealing and pickling line.
The venture also will continue to study the viability of developing into a fully integrated stainless steel producer with annual capacities of one million tonnes in steelmaking and 600,000 tonnes in cold rolling, based on continued assessment of future demand growth.
Nisshin Steel will hold a 33% shareholding in the joint venture, with Acerinox holding the remaining 67%.
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The company said the investment will further enhance its business relationship with Acerinox, which has been ongoing since Acerinox started operations in 1970. Nisshin Steel, which has supplied manufacturing technologies to the company and has worked to build global networks for its stainless steel business, says that it now intends to make Acerinox an equity method affiliate effective as of the 4th quarter of fiscal 2008.
Nisshin Steel made a framework agreement with Acerinox last March to launch a new joint venture in Malaysia to produce and sell cold rolled stainless steel strips and sheets. The companies have now concluded a definitive agreement to establish the joint venture, Bahru Stainless SDN BHD. Although the stainless steel market in the ASEAN region cannot escape negative effects of the current downturn of the global economy, in the medium and long-term, stainless steel demand is expected to grow continually in Malaysia (where the joint venture is based) and its neighboring countries.
Based on the expectation of continuously growing demand, the joint venture partners are proceeding with plant construction in order to launch commercial production in 2011 as originally scheduled. The joint venture will start as a cold rolled stainless steel sheet re-roller, but will continue studies on the viability of developing into a fully integrated stainless steel producer with annual capacities of one million tonnes in steelmaking and 600,000 tonnes in cold rolling, paying close attention to future demand growth.
Nisshin Steel has been a shareholder in Acerinox, an integrated Spanish stainless steel maker with production bases in the U.S. and South Africa, since 1970. In the U.S., through cooperation between North American Stainless (Acerinox’s U.S. subsidiary) and Nisshin subsidiary Nisshin Automotive Tubing, a system was built up to supply stainless steel pipes to U.S. customers, including Japanese transplants.
With the acquisition of additional shares of Acerinox, Nisshin intends to further strengthen the relationships with the Spanish producer and accelerate further globalization of the Company’s stainless steel business through continued discussions with them for effective use of mutual business resources.
Acerinox SA is a group of companies engaged in stainless steel manufacturing on a global basis, and ranks among the world’s largest stainless steelmakers. The Group has production bases for stainless flat products in three continents: Acerinox, SA in Spain, North American Stainless (NAS) in the United States, and Columbus Stainless in South Africa. Headquartered in Madrid, the company employs 7450.
