Nippon Steel’s Unit to Acquire Toshida Industry’s Pipe Plant in Wuxi

Nippon Steel and the wholly owned subsidiary, Nittetsu Steel Pipe announced on Wednesday Nittetsu Steel Pipe controls 100% of Wuxi TSD, which is Chinese subsidiary of Toshida Industry, to follow growing automotive steel pipe demand in east and north part of China. Nippon Steel and Sumitomo Pipe & Tube will have share in the renamed company, Wuxi NSP Automotive Parts, which is first offshore production base for Nittetsu Steel Pile. After the acquisition, Nittetsu Steel Pipe moves the plant to new site and expands the capacity to establish integrated operation from pipe making, pipe drawing to parts manufacturing.

Wuxi TSD was established by Toshida Industry and other companies in August 2004. Wuxi TSD has a 1 inch welding pipe making line, 2 pipe drawing lines and cutting facilities to supply automotive steel pipe in east and north part of China. Nittetsu Steel Pipe, which makes small diameter welded steel pipe in Japan and sells 70% of the products for automotive industry, tries to enter into rapid growing Chinese automotive steel pipe market through the acquisition.

Nittetsu Steel Pipe controls 51% of Wuxi NSP Automotive Parts with around 1.2 billion yen of capital. Toshida Industry has 17% share in the new company while Nippon Steel and Sumitomo Pipe & Tube have 10% share each and Nippon Steel Trading has 12% share in the new company. The new company adds a 2 inches welding pile making line, which is moved from Nittetsu Steel Pipe’s plant, a pipe in coil drawing machine and cutting equipment based on equipments of Wuxi TSD. The new company moves the plant with limited space to new site in the same industrial park in Wuxi for the expansion.

The new company will get approval from the authority in mid-March and completes new plant construction by end of September. The firm starts operation of new 2 inch pipe making line in and after March 2011 while the firm moves existing equipments to new site by end of September 2011. Nittetsu Steel Pipe issues new share in February 2010 through allocation to Nippon Steel for the acquisition and expansion.