NSSC reduces operating costs
Japan's largest steel producer Nippon Steel and fourth largest steelmaker Sumitomo Metal Industries Ltd. have announced that they signed an agreement to form a joint venture, called as Nippon Steel & Sumikin Stainless Steel Corp. (NSSC) for stainless steel operations. NSSC will be active from October 1, 2003 and will produce hot rolled stainless sheets, plates, bars, wire rods, slabs and billets with an annual capacity of around 1 million tons. 80% stake which is equal to Yen 5 billion (approx. $43 million) will be owned by Nippon and balance 20% by Sumitomo. The new company will be located in Tokyo with around 1.300 employees. The foreseen sale for NSSC is Yen 150 billion, according to company authorities. Furthermore, the new company is aiming to reduce operating costs instead of increasing the sales. In addition, Sumitomo will close its stainless cold rolled mill at Kashima while Nippon will close its stainless medium and heavy plate mill at Yawata as well as its melting, slabbing and stainless cold rolled facilities at Hikari. Furthermore, a number of sales offices will be closed by Nippon and Sumitomo. The two companies will also give up their stakes in Thai stainless cold roller Thainox Steel and Sumitomo Metal's stake in Taiwanese stainless maker Chang Mien Industries. Company authorities stated that Nippon will hold its hot strip mill located at Yawata, its stainless seamless pipe plant and its stainless foil facility Hikari. Also Sumitomo will keep control of the melt shop and round billet caster which supplies feeds for stainless seamless pipe production at its Amagasaki plant and its precision rolled and shaped stainless subsidiary Sumitomo Metals (Naoetsu) which produces stainless clad sheets.