Kobe Steel, Ltd. and JFE Steel Corporation reached a basic agreement today that will further strengthen their ongoing alliance in the welding business. Their joint venture, KOBE JFE Welding Co., Ltd., will become a wholly owned subsidiary of Kobe Steel. Kobe Steel currently holds an 80% share in KOBE JFE Welding, while JFE Steel has 20%.
In addition, the JFE Steel Group plans to transfer 80% of its entire equity held in JFE Welding Rod Co., Ltd., a JFE Steel Group company that markets welding consumables, to Kobe Steel. Both changes will take place on April 1, 2005.
In July 2002, Kobe Steel and JFE Steel began to collaborate in the research and development of welding consumables in order to strengthen and further develop their welding businesses. On October 1, 2003, they established KOBE JFE Welding Co., Ltd., which began consignment production of solid welding wires.
The alliance provides Kobe Steel and JFE Steel with adequate preparation time to transfer original technology for welding consumables. As a result, the production of solid welding wires will be consolidated to Kobe Steel and KOBE JFE Welding, allowing JFE Steel to close down its Chiba district welding plant at its East Japan Works at the end of March 2005.
JFE Welding Rod will continue to supply welding consumables to the shipbuilding, steel structure, automotive and numerous other customers.
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