Nippon Steel & Sumikin Metal Products Enters Sheet Pile JV in China

Nippon Steel & Sumikin Metal Products, Nippon Steel Trade and Jiangsu Guoqiang Industrial jointly announced on Wednesday the three companies agreed in establishment of a production and sales joint company of cold rolled sheet pile in China in January 2011. The joint company’s capital fund is 65 million yuan (approximately 800 million yen), 50% invested by Jiangsu Guoqiang Industrial, Chinese major processor of industrial steel products, while 45% by Nippon Steel& Sumikin Metal Products and 5% by Nippon Steel Trade.

The joint company will start production of cold rolled steel sheet pile in 3Q of 2011 with output capacity at around 100,000 tonnes per year. The sales target is several hundred million yen per annum for first 1-2 years and several billion yen in future.

Steel sheet pile market in China is estimated at 300,000-400,000 tonnes per year involving hot and cold rolled products. The market is expected to approach 500,000 tonnes in 2011. Cold sheet pile accounts for 10% of the market, used for civil river development, metro or common duct.

Jiangsu Guoqiang Industrial is a major processor of guardrails, pipes or galvanized steel products. The company posted annual revenue at 2.57 billion yuan (approximately 32.2 billion yen) in 2009. Nippon Steel and Nippon Steel Trade have sold steel materials to the firm.

Nippon Steel & Sumikin Metal Products provides knowhow of production management and sales operation. Nippon Steel Trade utilizes its sales network in China and cooperates in the joint company’s sales operation. Nippon Steel Trade entered Chinese market 20-30 years ago and recently holds 10 sales bases in the country.

This will be the first cold forming line in China as a civil products maker. Mr. Kiichiro Masuda, president of Nippon Steel& Sumikin Metal Products, said the firm tries to strengthen domestic business base while follow overseas market growth. Nippon Steel& Sumikin Metal Products will establish another joint company of civil steel products in Taiwan in January 2011.