Japanese steelmaker
Kobe Steel has announced that it has signed a memorandum of understanding with Thailand-based Millcon Steel Public Company Ltd to considering establishing a joint venture for production and sale of steel wire rods in Thailand. If the joint venture is realized, it will be
Kobe Steel's only base overseas that produces wire rods.
Last year, Millcon Steel acquired the assets of Thai Special Steel Industry Public Company Limited (or TSSI) and set up Millcon Special Steel Company Limited to hold the assets.
Kobe Steel and Millcon Steel now intend to convert Millcon Special Steel into a joint venture by
Kobe Steel's equity participation. The two companies will begin discussions on the structure of the joint venture including the shareholding ratio, production equipment, and amount of capital investment.
Automobile production in Thailand reached 1.88 million units in 2014, according to the Federation of Thai Industries. Production is anticipated to increase to approximately 3 million units in 2020, said CSM Worldwide, an automotive market forecasting company. Other ASEAN countries such as Indonesia and Malaysia are also anticipated to experience strong growth in automobile production in the future.