Japan Two Coil Centers Agree Facilities Optimization for Higher Productivity

Japanese two coil centers, Murayama Steel Products Corporation headed in Tokyo and Fujisawa Steel headed in Chiba announced on Thursday they reached a basic agreement to integrate their flat rolled steel processing facilities and enter mutual cooperation in order to solve overcapacity and raise both companies’ operating rate. Murayama Steel Products mainly purchases Nippon Steel’s steel through Metal One while Fujisawa Steel mainly procures JFE Steel’s steel through Marubeni-Itochu Steel. This is the rare alliance case between coil centers belonging to different maker and trader lines.

Current operating rate is slightly less than 70% at the two coil centers. They expect the rate could improve to more than 100% in and after midyear of 2012 when they commence actual business cooperation. Processing of flat rolled steel with more than 6 millimeters of thickness will be integrated in Murayama Steel Products. Fujisawa Steel will mainly cover processing of the steel with 6mm or less.

Murayama Steel Products’ president Kazuo Murayama said both firms try to realize technology improvement and cost reduction by mutual share of their technological know-how though they maintain corporative independence. Fujisawa Steel’s president Tetsuo Fujisawa indicated two coil centers will examine wider partnership involving human contact or joint procurement of substantial materials.

The two coil centers will optimize their processing capacities. Murayama Steel Products will reduce leveling lines from present three to two. The firm will move a large leveler which can process steel sheet with maximum 25mm thickness from Tokyo plant to Urayasu plant in June-July 2012. Then Tokyo plant will be shut down. Fujisawa Steel will dismantle its two old levelers and succeed one leveler from Murayama Steel Products.