Japanese steelmaker Sumitomo Metal Industries, Ltd (Sumitomo Metals) has announced that, as part of their cooperative measures, Sumitomo Metals and Japan's biggest steelmaker Nippon Steel Corp (Nippon Steel) have decided to integrate the arc-welded stainless steel pipe and tube businesses currently conducted by their respective group companies, and a definitive agreement has been executed by and among Sumitomo Metals, Nippon Steel, Sumikin Stainless Steel Tube Co., Ltd. (a subsidiary of Sumitomo Metals), Nittai Corporation (a joint venture of Nippon Steel and Mitsui & Co., Ltd.) and Konan Co., Ltd. (a subsidiary of Nittai).
By integrating the operations of both groups, each having strong technological and sales capabilities, a leading, specialized company in the arc-welded stainless steel pipe and tube industry will be created. By leveraging the strengths of each party, efficient systems for production and sales will be established and high competitiveness will be achieved.
According to the agreement, Nippon Steel will establish a wholly-owned subsidiary to which the arc-welded stainless steel pipe and tube businesses of Nippon Steel, its subsidiary Nittai and Nittai's wholly-owned subsidiary, Konan, will be transferred. Subsequently, Sumikin Stainless Steel Tube will merge with the above newly-established company and will continue to produce seamless stainless steel pipe at the Shonan plant (Fujisawa City, Kanagawa Prefecture) of the new integrated company and complete the business integration. Sumitomo Metals will have a 60 percent stake while Nippon Steel will hold 40 percent in the new integrated company, known as Sumikin & Nippon Steel Stainless Steel Pipe Co., Ltd.
Completion of the integration is currently scheduled for July 1, 2009. The present three production sites (Sumikin Stainless Steel Tube Koga plant in Koga City, Ibaraki Prefecture; Nittai in Noda City, Chiba Prefecture; Konan in Hikari City, Yamaguchi Prefecture) will be consolidated into two locations, Koga and Noda.