BlueScope, NSSMC start up coated products joint venture
Australia’s BlueScope Steel and Japan’s Nippon Steel & Sumitomo Metal Corp (NSSMC) have started operating their $1.36 billion coated products joint venture.
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The sale of a 50% stake in Bluescope’s coated steels unit to NSSMC was concluded on Thursday March 28. Bluescope hopes to tap bigger markets and new technologies from its Japanese partner, in addition to pocketing $540 million from the sale.
“The [joint venture] is being considered as a supplier to a number of key Japanese customers in the region and it will look at manufacturing products for the home appliance market,” Paul O’Malley, BlueScope’s md and ceo, said.
The joint venture, called NS BlueScope Coated Products, will be headquartered in Singapore and led by Sanjay Dayal.
“By inputting NSSMC’s proprietary technologies and product bundles to the joint venture, NSSMC is pursuing the opportunities to access and capture a larger market field, such as the home appliances market in Southeast Asia, taking advantage of NSSMC’s geographic proximity to the market,” the Japanese steelmaker said.
NSSMC also said it wanted to exploit rapidly expanding demand for coated products in the building and construction fields in Southeast Asia and North America.
The jointly owned company is establishing its own debt funding facilities for $300 million, BlueScope said. These facilities will be used to repay existing financing provided by BlueScope and for ongoing funding requirements, it added.
“The proceeds from this investment by NSSMC strengthen BlueScope’s balance sheet and financial flexibility. The [joint venture] provides a platform for us to invest selectively in growth opportunities,” BlueScope chairman Graham Kraehe said.
NS BlueScope Coated Products will employ over 3,000 people across 29 plants in seven countries.