Nippon Steel, Baosteel to Strengthen Partnership

Mr. Akio Mimura, president of Nippon Steel said to reporters on Sunday the firm starts study for further partnership including cross shareholding with Baosteel Group of China. The firm seeks new cooperation projects only after the firm studies the projects and is assure of the synergy. The Asian steel majors try to form partnership when Mittal Steel acquired Arcelor to become world steel giant. Mr. Mimura said he met with Chairwoman Xie Qi Hua of Baosteel Group at Nippon Steel’s headquarters on Friday and Ms. Xie offered cross shareholding and further alliance in the a hour and 40 minutes talk. Mr. Mimura said the further partnership is in very early stage but if they could expect merit each other, they could have the share each other. He said the firm has to find synergy for further partnership including cross shareholding with Baosteel. If there would be no synergy, he doesn’t move forward to the cross shareholding. He said Baosteel might seek stable alliance between Asian steel majors when the state owned Baosteel has no intention to prevent potential takeover. Mr. Mimura said Nippon Steel decided to meet growing automobile flat steel demand through the partnership with Baosteel. He expects Chinese automobile output will increase and automotive steel supply could become tight. However, he said the firm still needs to find the timing for additional capital expenditure in China including expansion of Baosteel-NSC/Arcelor Automobile Steel Sheets (BNA). Asked about intention to join Baosteel’s integrated steel projects in Zhanjiang, Mr. Mimura said Baosteel is still waiting for official approval for the project. He said Baosteel didn’t offer for the partnership in the project officially.