Nisshin Steel Acquires Acerinox’s Stake to 15%

Nisshin Steel, Japanese major stainless steel maker, announced on Wednesday the firm additionally acquired the stake of 9.359 million shares in Acerinox, Spanish largest stainless steel maker, at 12.97 million yen. Nisshin Steel’s equity in Acerinox increased to 15% from 11.3%. Acerinox becomes an equity method affiliate of Nisshin Steel from January-March 2009. Nisshin Steel contracted a joint business of cold rolled stainless steel sheet plant in Malaysia with Acerinox in January. Nisshin Steel sent 2 board members to Acerinox. Nisshin Steel will cooperate closely with Acerinox and enhance global stainless steel business.

Nisshin Steel and Acerinox agreed in the construction of a cold-rolled stainless sheet plant, Bahru Stainless, in Malaysia in March 2008. The JV will have a capacity of 240,000 tonnes per year. Acerinox takes a 67% share and Nisshin Steel takes a 33% share in the JV. They invest approximately US$ 320 million (28.7 billion yen) for the plant with a cold-rolling mill, annealing and pickling equipments starting in 2011.

Stainless steel demand is currently weak. But Nisshin Steel enhances the supply base to meet the middle- and long-term demand growth in South East Asia. They will supply hot-rolled coil to Malaysian plant initially and they will build up the plant for steel making process in future. They plan the plant with steel making capacity of 1 million tonnes per year and cold-rolling capacity of 600,000 tonnes.

Nisshin Steel took the first stake in Acerinox in 1970, when Acerinox was established. The firm has supported Acerinox, which has the capacity of 3.5 million tonnes per year, through technology cooperation in 2 bases in Spain, USA and South Africa.