Nippon Steel & Sumikin Metal Products to Take 100% Shares in Kyoei Kenzai

Nippon Steel & Sumikin Metal Products and Kyoei Steel announced on Wednesday the companies agreed in the acquisition that Nippon Steel & Sumikin Metal Products takes whole shares in Kyoei Kenzai, Kyoei Steel’s 100% subsidiary, effective on April 1, 2012. Kyoei Kenzai is Osaka based column maker. The share taking value is not disclosed. Nippon Steel & Sumikin Metal Products holds approximately 30% column market shares in Japan while Kyoei Kenzai holds about 10%. The total market shares will reach around 40%.

Nippon Steel & Sumikin Metal Products manufactures columns at Sendai works in Miyagi Prefecture and Hirohata works in Hyogo Prefecture. Kyoei Kenzai’s manufacturing site is located in Shiga Prefecture. Nippon Steel & Sumikin Metal Products plans to establish most effective and competitive production and sales scheme by full utilization of these three factories.

Japanese domestic demand for rolled column is estimated at around 350,000 tonnes per year. Domestic construction market has shrunk in recent years while Tokyo Steel Manufacturing has currently entered column production. Thus sales competition has become even severer.

Nippon Steel & Sumikin Metal Products and Kyoei Steel started talks at the yearend 2011. They decided to make Kyoei Kenzai under Nippon Steel & Sumikin Metal Products since there are few overlapping business bases and mutual synergies are expected.

Kyoei Kenzai was established in 1964. The capital fund is 100 million yen. There are 27 employees currently working. The recent annual revenue was 3.4 billion yen. Rolled column accounts for 90% in the total output and sales volume while the rest 10% is light weight shape steels.