Nippon Steel, Godo Steel to Seek Additional Synergy

Nippon Steel and Godo Steel announced on Wednesday they agreed for further partnership. They seek synergy through additional tie-up items to improve the international competitiveness. Nippon Steel makes Godo Steel equity method affiliate after Nippon Steel subscribes 6.116 billion yen allocation of new shares by Godo Steel increasing the interest in Godo Steel from current 9.5% to more than 15%. Godo Steel increases the interest in Nippon Steel from 0.03% to 0.07% through 2 billion yen of additional share purchase. Under the new agreement, Nippon Steel uses more steel source and rolling capacity and berth and warehouse at Himeji plant in Hyogo of Godo Steel. Godo Steel supplies monthly 5,000 tonnes of billet from Funabashi plant in Chiba to Nippon Steel while Nippon Steel entrusts monthly 5,000 tonnes of carbon steel wire rod rolling to Osaka plant of Godo Steel. They already started the part of additional tie-up in April and increase the volume to the target level after October. Nippon Steel studies to entrust monthly 1,000 tonnes of structural steel bar rolling to Himeji plant of Godo Steel. With the additional tie-up, Nippon Steel can increase the output of high valued steel products by 10,000 tonnes. Nippon Steel sends president of Godo Steel, supplies monthly 20,000 tonnes of billet to Godo Steel and conducts carbon steel wire rod OEM at monthly 1,000-2,000 tonnes each other. Godo Steel produces monthly 120,000 tonnes of steel products including 40,000 tonnes of concrete reinforcing steel bar at Funabashi, 40,000 tonnes of carbon steel wire rod and 20,000 tonnes of shapes at Osaka plant and 20,000 tonnes of structural steel bar at Himeji plant.