Japanese steel manufacturers Nippon Steel and Kobe Steel have reached a basic agreement to integrate their road-related business to boost competitiveness in times of low road construction investment in Japan.
The two companies expect the road-related industry in Japan to worsen in the coming years on shrinking population. Road-related business of Nippon Steel Metal Products (NSMP), a 100pc subsidiary of Nippon Steel and all businesses of Kobleco Engineered Construction Material (KECM), a subsidiary of Kobe Steel will be integrated, according to the agreement. The definitive agreement is expected to be signed on Apr 1, 2021, and the new company would be called Nippon Steel and Kobelco Metal Products, with 65pc shares owned by NSMP and 35pc shares by Kobe Steel.
The guard fence business will be consolidated to two sites; one in Nogi, eastern Japan, owned by NSMP and the other in Amagasaki, western Japan, owned by KECM. NSMP’s Osaka plant is expected to shut down in two years after the integration is complete. These consolidations will help the two companies optimise manufacturing cost.