Steel trio unveil China venture
 |
China's automotive industry is one of the fastest growing sectors of the economy.
Story Tools
YOUR E-MAIL ALERTS
|
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.
Or, visit Popular Alerts for suggestions.
|
|
(CNN) -- Luxembourg-based Arcelor, the world's biggest steelmaker, is joining forces with Nippon Steel and China's Baosteel in a 6.5 billion yuan ($785 million) venture to supply steel sheets to carmakers based in China.
Arcelor Chief Executive Officer Guy Dollé said in a statement released Tuesday in Shanghai that the joint venture is designed to "seize the tremendous growth opportunities offered by the Chinese market."
Baosteel will hold 50 percent of the venture, while Nippon Steel -- the world's second largest producer of crude steel -- will hold 38 percent. Arcelor will own the remaining 12 percent.
The plant, to be based in Shanghai, will have a capacity of 1.7 million tonnes of steel a year and will begin supplying customers from May 2005.
It will include cold rolling and galvanizing operations and will be built next to Baosteel's upstream production facilities.
Nippon Steel and Arcelor have also agreed to introduce uniform specifications for their high-end steel plates for the automotive industry.
According to the Nihon Keizai business daily, customers are expected to include Japanese makers Toyota, Nissan and Honda, and European makers Volkswagen, Renault, DaimlerChrysler and GM of the United States.
Under the agreement, Japanese carmakers in Europe, for example, will be able to obtain steel from Arcelor to the same specifications as that made in Japan by Nippon Steel.
In July this year, Arcelor and Baosteel said they were planning to set up a joint-venture operation in the Shanghai area.
This venture, using raw materials from Baosteel and technology from Arcelor, was to supply tailor welded blanks to carmakers in China.
China is the world's largest producer of steel, with an expected output of 210 million tonnes this year. But with the economy running at a growth rate of about 8 percent, domestic demand is more than 250 million tonnes, requiring China to import steel.
