Ternium South America and Nippon Steel Corporation announced October 4 that they have signed a definitive agreement to form a joint venture in Mexico for the manufacturing and sale of hot-dip galvanized and galvannealed steel sheets to serve the Mexican automotive market. The joint venture will operate under the name of Tenigal SRL de CV (Tenigal).
Ternium and Nippon Steel will hold 51 percent and 49 percent participation in Tenigal, respectively. Tenigal plans to build a hot-dip galvanizing plant in the vicinity of Monterrey City (equivalent to the state-of-the-art equipment now in operation at Nippon Steel's steelworks in Japan) with a production capacity of 400,000 metric tons per year. Construction of the facility would require a total investment of approximately US$350 million. The plant is expected to commence production of high-grade and high quality galvanized and galvannealed automotive steel sheets, including outer-panel and high-strength qualities, in 2013.
The Mexican automobile market is a growing and important market for both Nippon Steel and Ternium, and continued growth is anticipated in the future. Tenigal is expected to serve the demanding requirements of the automotive industry in Mexico, including those of the Japanese car makers.