Nippon Steel Corporation, Sumitomo Pipe & Tube Co., Ltd, Sumitomo Corporation, and Metal One Corporation have established a joint venture company in Mexico to build a manufacturing and sales base for automotive steel pipe and tube, as demand is expected to grow significantly there in the future.
Approximately 2.6 million automobiles were produced in Mexico in 2011. Production is expected to increase substantially in the future as a result of new entry into the Mexican market and the increasing production capacity of Japanese automakers. This increase in automobile production is expected to lead to a rapid expansion of demand for middle- to high-grade steel pipe and tube in which Nippon Steel and Sumitomo Pipe & Tube have competitive strength.
Nippon Steel, Sumitomo Pipe & Tube, Sumitomo Corporation, and Metal One have long discussed entry into the Mexican market with a view of capturing demand for automotive steel pipe and tube in this country. Recently, they agreed to jointly establish a corporation in Mexico and begin the construction of a plant at the land acquired in Silao, in the state of Guanajuato.
The joint venture company is scheduled to begin production in June 2013 and will supply products to Japanese, North American and European automakers and auto parts manufacturers in Mexico.
Nippon Steel, Sumitomo Pipe & Tube, Sumitomo Corporation, and Metal One will continue to develop and expand their overseas businesses actively in order to respond to global demand for automotive steel pipes and tubes.
Business summary:
1. Company name: NIPPON STEEL PIPE MÉXICO, S.A. DE C.V.
2. Location: Silao, in Guanajuato State
3. Representative: Keizo Kawamura (dispatched from Nippon Steel)
4. Description of business: Manufacturing and sales of steel pipe and tube for automobiles (two- and four-wheeled)
5. Shareholding: Nippon Steel (55%), Sumitomo Pipe & Tube (18.75%), Sumitomo Corporation (6.25%), Metal One (20%)
6. Capital: Approx. US$24 million
7. Investment: Approx. US$39 million
8. Major equipment: Electric-resistance welded pipe and tube manufacturing equipment, cold-drawing equipment, heat treatment equipment (bright normalizing furnace), etc.
9. Start of Production: June 2013
10. Production capacity: Approx. 2,000 tonnes/month
11. Number of employees: Approx. 200