Ryo Hattori, Nisshin Steel Co., Ltd. Restructuring Japanese Stainless Industry and Globalization Nisshin s Choice

Transcription

1 Ryo Hattori, Nisshin Steel Co., Ltd. Restructuring Japanese Stainless Industry and Globalization Nisshin s Choice

2 1. About Nisshin Steel (1) (Millions of tons) Crude Steel '2007/3 '2008/ / / /03 1

3 Nisshin 1. About Nisshin Steel (2) (1) is focusing strategically on Flat rolled segments. (2) is a major player in High value-added products. Stainless Steel, Specialty Steel and Coated Steel (3) has put very much emphasis on Customer-Oriented Products development and marketing. (4) has established the Global partnerships with Acerinox - Spain, Baosteel - China, and others. 2

4 1. About Nisshin Steel (3) Product mix by Volume (2010) Special Steel 11% Hot & Cold Rolled Steel 10% Coated Steel 47% Stainless Steel 32% 3

5 2. History of Japanese Stainless Steel Mills 1950 th : Yawata Iron & Steel, Nisshin Steel, Kawasaki Steel, Nippon Metal, Nippon Yakin, Nippon Stainless, Nippon Kinzoku, Takasago Tekko Integrated Mills & 2 Re-rollers 1992 : Sumitomo Metal took over Nippon Stainless 2003 : Nippon Steel & Sumitomo Stainless Steel started, JFE Steel started 2010 : Takasago Tekko ceased Stainless Steel production 2012 : Nisshin Steel & Nippon Metal agreed for Merger Integrated Mills & 1 Re-roller 4

6 Year 3. Stainless Steel Production in Japan & World 1957 Melting basis. (Include all Stainless Products.) (KT) Year Japan ,250 1,880 2,820 3,450 2,930 World 1,800 3,000 4,950 6,890 12,850 19,490 32, (KT) 0 10,000 20,000 30,000 40,000 Source: ISSF, JSSA 5

7 4. Stainless Steel Production in Japan (Flat Products) ,000 1,500 2,000 2,500 3,000 Source: JSSA, Niishin's estim ation. Include heat resistant steel. Hot coil data is net. (Deducted estim ated cold rolled volum e.) 10Years Average Approx. 2,400KT Hot Rolled (KT) Cold Rolled 6

8 5. Stainless Steel Demand in Japan (Flat Products) Estimated Domestic Consumption (Flat products only: HR+CR) ,000 1,500 2,000 Source: JSSA, Niishin's estimation. Include heat resistant steel. Hot coil data is net. (Deducted estimated cold rolled volume.) 10Years Average Approx. 1,500KT (KT) 7

9 6. Merger of Nisshin Steel & Nippon Metal (1) Back Ground - Out dated production facilities (Especially upstream) - Limited market growth in Japan utmost 2% p.a. - Hollowing out of Japanese industries (Automobile, Electrical Home Appliance) - Threat of imported materials - Rapid growth of the overseas Stainless Steel producers - Raw material cost pressure - Over production capacity in Japan - Currency appreciation Strong Yen - Less export competitiveness 8

10 6. Merger of Nisshin Steel & Nippon Metal (2) Synergy Effect Yen 13 Billion (Approx. US$ 163 Million) in 5 years 1) Production Cost Reduction - Consolidation of steel making Integrate steel making to Shunan - Optimization of hot rolling process and balanced downstream production - Increase raw material competitiveness 2) Sales - Optimize marketing structure and sales channels - Quality improvement by using Steckel hot-rolling mill in Kinuura 3) Overseas Business - Expansion of business especially in Southeast Asia 4) Others - Group companies restructuring and integration head office operation etc. 9

11 7. Japanese Stainless Mills Melting Capacity NSSC Nisshin+NTK JFE NAS (Nippon Yakin) (KT) Japanese Total Melting Capacity is Approx. 3,000KT 10

12 8. Nisshin Steel Co., Ltd. (Shunan Works) - Area : 1,000,000 Sqm - EAF(160 mt) - LD / VOD / CC - 7 ST Tandem Mill (Kure Works) - APL (H), APL(C) - ZRM - BA 11

13 9.Nippon Metal Industry (Kinuura Works) - Area : 650,000 Sqm. - EAF (70mt) - LD / AOD / VOD / CC - Steckel Hot Rolling Mill - APL (H/C), APL(C) - ZRM 12

14 10. Road Map to Merger - November 15, 2011 Execution of letter of intent to begin the consideration of the Business Integration - December 20, 2011 Receipt of Notice of Non-Issuance of Cease and Desist Order from the Japan Fair Trade Commission - March 19, 2012 Execution of master business integration agreement - April 27, 2012 Execution of share transfer agreement and drafting of share transfer plan - June 26, 2012 Annual shareholders meetings to approve the share transfer plan (scheduled) - October 1, 2012 Implementation date of the Business Integration (scheduled) - October 1, 2012 Listing date of shares in the Holding Company (scheduled) 13

15 11. Leading Stainless Steel Producer Nisshin and Nippon Metal will establish itself as the No. 1 manufacturer in stainless steel business in Japan. (i.e., technology, development, marketing and earnings) Not volume but profitability. Also develop a firmer business platform to be one of the top stainless steel manufacturers in the world by consolidating and taking full advantage of their business resources. 14

16 12. Major Stainless Steel Producers in the World 5 Mt Club - Outokump (After merger with Inoxum) 3 Mt Club - Acerinox Group, Aperam Group, POSCO Group, TISCO 2 Mt Club - YUSCO (Include LISCO) 1.5 Mt Club - AK Steel, Bao Steel, Jindal 1 Mt Club - NSSC, Alleghney, JISCO, - Nisshin (Target after merger with NTK : 0.8 Mt) 15

17 13. Nisshin s Technical Assistance Achievements (Stainless Steel) - Acerinox ( ) - Otelinox (1976) - Sammi Corporation (Current Hyundai BNG) ( ) - TISCO ( ) - POSCO ( ) - Tubificio di Terni ( ) - Columbus ( ) - YUSCO ( ) - NAS (North American Stainless) ( ) - Ningbo Baoxin (1997- present) - Jindal Stainless ( ) - Nisshin Auto Tubing (2004-present) - ANS Steel Tubes ( ) 16

18 14. Global Network of Nisshin Steel Acerinox Tianjin Rihua North American Stainless (NAS) Chang Fu Stainless Steel Wheeling Nisshin (W-N) Tubificio di Terni Ri Hong Stainless Ningbo Baoxin ANS Steel Tubes Nisshin Steel Bahru Stainless Nisshin Automotive Tubing (NAT) Columbus Steel sheets Steel tubes Coil center 10 Invested Companies 6 Countries(U.S.A., China, India, Malaysia, Spain, Italy) 17

19 Thank You for your attention!