Major Japanese electric furnace steelmaker Kyoei Steel Ltd and its mid-ranking competitor Tokyo Tekko Co. announced on Wednesday, March 18 that they have reached a basic accord to set up a joint holding company on October 1, 2009 to integrate their managements.
The producers of bar steel for reinforced concrete said they chose to integrate into a competitive group amid declining construction demand. The integration would bring about a nationwide bar steel supply network as Kyoei Steel is strong in western Japan and Tokyo Tekko has concentrated business operations in eastern Japan.
Accordingly, Kyoei Steel and Tokyo Tekko will be delisted from the first section of the Tokyo Stock Exchange on September 25 before the holding company is listed there on October 1.
Kyoei Steel president Ryutaro Yoshioka will be named as president of the holding company, while Tokyo Tekko president Tsunebumi Yoshihara will be chairman of the planned firm.
In the year to March 2008, Kyoei Steel recorded a group net profit of Yen 11.07 billion ($117 million according to the current exchange rate), while Tokyo Tekko posted a net profit of Yen 2.99 billion ($32 million based on the current exchange rate).