Jan 31 2007
Nippon Steel Corporation (“Nippon Steel”) and CHUBU STEEL PLATE CO., LTD. (“CHUBU STEEL”) have agreed to pursue strategic alliance for enhancing their respective competitiveness. A “Joint Study Committee” (provisional name) will be established by both companies to explore specific measures.
Anticipating future changes in steel demand and growing international competition, this collaboration aims to provide both Nippon Steel and CHUBU STEEL with benefits through implementation of specific collaboration measures.
Below are areas for collaboration that the two companies have agreed to study. Other areas will be added if future discussions determine that addition is advantageous to both companies.
- Effective utilization of each other’s production facilities (consignment production)
- Mutual cooperation for cost reduction in production, equipment repairs, procurement of raw materials, and distribution of products
- Nippon Steel’s engineering of the infrastructure improvement of CHUBU STEEL PLATE’s rolling mill.
Through the study and implementation of strategic alliance measures in the above areas, both companies intend to build cooperative relationships that strengthen their respective competitive edge.
The two companies have also agreed that Nippon Steel will purchase up to approx. 5% of CHUBE STEEL’s total issued shares through subscribing for shares that CHUBU STEEL is issuing on February 15 by a third party allotment for financing its rolling mill infrastructure improvement. This will facilitate smooth and efficient cooperation between both companies.