Nisshin Steel, Nippon Metal Industry to Agree Merger

Nisshin Steel and Nippon Metal Industry will reach agreement to merge the business soon under ongoing negotiation. They try to improve the international competitiveness by seeking the synergy in technology and facility to grow international market while Japanese domestic demand decreases. The stainless output capacity reaches around 1 million tonnes per year, which is as large as Japanese largest stainless maker, Nippon Steel & Sumikin Stainless (NSSC).

Nisshin Steel, which has 5.1% share in Nippon Metal Industry, is largest shareholder of Nippon Metal Industry. They expanded the alliance when Nippon Metal Industry’s Kinuura plant rolls hot rolled coil for Nisshin Steel’s Shunan plant.

They started the merger talk after Japanese Fair Trade Commission revised the merger guideline in June to allow larger domestic share depending on global market share and availability of offshore sources. They apparently enforce the talk when Nippon Steel and Sumitomo Metal Industries seek consolidation.

Nisshin Steel tries to focus on special flat steel, coated steel and stainless. The firm establishes global production network through alliance with Baosteel Group of China and Acerinox of Spain. Nisshin Steel has advantage in global stainless network in Japanese industry.

Nippon Metal Industry builds the technology advantage as integrated steel maker with stainless steel making operation since the start in 1932. The firm launched Bangkok office in Thailand to develop the market. The firm tries to expand the sales of original products including D series with lower nickel content. The firm has subsidiaries in Malaysia and Singapore. The firm launched joint sales company with Marubeni-Itochu Steel in Taiwan in December 2010 to expand the sales of precision products.