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Nippon Steel & Sumitomo Metal Corp : Integration of Bar & Wire Processing Companies in Thailand

10/30/2012 | 08:21am US/Eastern
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Oct. 02, 2012

Nippon Steel & Sumitomo Metal Corporation


Integration of Bar & Wire Processing Companies in Thailand

Nippon Steel & Sumitomo Metal Corporation (hereinafter referred to as the "Corporation") has announced that, with respect to Steel Processing (Thailand) Company Limited (hereinafter referred to as "SP") and Nippon Steel Bar & CH Wire (Thailand) Company Limited (hereinafter referred to as "NBC Thai"), which are bar and wire processing companies in Thailand, it has decided to integrate these companies with a plan of completing in January 2013, and, accordingly, that these two companies have signed a merger agreement on October 1, 2012.

The name of the integrated company is NIPPON STEEL & SUMIKIN Steel Processing (Thailand) Company Limited (hereinafter referred to as the "Integrated Company") and is scheduled to be a consolidated subsidiary of the Corporation.

1. Purpose of the Integration
SP was established in 1997 as a subsidiary of the former Sumitomo Metal Industries Ltd., and NBC Thai was established in 2006 as a subsidiary of the former Nippon Steel Corporation. Since then, the two companies, as bar & wire processing companies highly capable of responding to technological, quality, and delivery requirements, have been supportive and contributory to the growth and development of Japanese-affiliated automakers, machine parts makers, and other customers in the Thai market.

In this promising growth market of Thailand, aiming to meet demand appropriately and to establish a more efficient management structure, the Corporation has decided to integrate these subsidiaries.

The Integrated Company, supported by the Corporation and other equity-holders, namely, other bar & wire processing companies, regarding aspects of technology and quality, will be producing high-quality steel bar & wire. The production capacity will be 84,000 t/y of steel wire for cold heading & cold forging and 18,000 t/y of cold-finished steel bars. This will rank it the largest scale among the Japanese-affiliated bar & wire processing companies in Southeast Asia. With all of its production capacities and abilities to respond to requests for high-quality products, the Integrated Company will be responding to the expanding and increasingly severe requirements of customers.

2. Summary of the Integration

(1) Method of the Integration
 In accordance with the laws and regulations of Thailand, the integration shall take the form of an amalgamation, and upon the amalgamation, the Integrated Company shall assume all the rights and responsibilities of SP and NBC Thai, by which both of SP and NBC Thai are to be dissolved.

 The integration ratio is:
 SP : NBC Thai = 1 : 0.55

(2) Schedule for the Integration
 October 2012: 
 Execution of the merger agreement between SP and NBC Thai
 January 2013, provisionally:
 Launching of NIPPON STEEL & SUMIKIN Steel Processing (Thailand) Co., Ltd.*

* Subject to all necessary governmental approvals and licenses required to be obtained as well as all consents, approvals, waivers and other necessary protective procedures for all third parties, lenders and creditors

3. Outline of the Integrated Company

(1) Name:
NIPPON STEEL & SUMIKIN Steel Processing (Thailand) Co., Ltd.
(2) Head Office:
Eastern Seaboard Industrial Estate, Rayong, Thailand. (Currently, the location of SP)
(3) Business:
Manufacture and sale of steel wire for cold heading & cold forging and cold-finished steel bars
(4) Capital: 571 million bahts
(5) Equity ratio:
Nippon Steel & Sumitomo Metal Corporation 58.91%; Sumitomo Corporation 10.76%; Matsubishi Metal Industry Co., Ltd. 4.96%; Miyazaki Seiko Co., Ltd. 4.96%; Sanyu Co., Ltd. 4.96%; Nippon Steel & Sumikin Steel Processing Co., Ltd. 2.65%; Toyota Tsusho Corporation 4.26%; Metal One Corporation 3.55%; Suzutoyo Seiko Co., Ltd. 2.84%; and Sumitomo Corporation Thailand Ltd. 2.15%
(6) Production capacity:
84,000 t/y of steel wire for cold heading & cold forging 18,000 t/y of cold-finished steel bars


Reference: Outlines of SP and NBC Thai

[SP] 
Business:  
Manufacture & sale of steel wire for cold heading & cold forging and cold-finished steel bars
Establishment:   1997
Location:   Eastern Seaboard Industrial Estate, Rayong, Thailand
Representative: Shinichi Inaba
Capital:   341 million bahts
Shareholder formation: 
Nippon Steel & Sumitomo Metal Corporation 75.9%; Sumitomo Corporation 16.7%; Nippon Steel & Sumikin Steel Processing Co., Ltd. 4.1%; and Sumitomo Corporation Thailand Ltd. 3.3%
Total assets (as of the end of 2011):  1,790 million bahts
Employees (as of the end of June 2012):  142
Production capacity: 
44,000 t/y of steel wire for cold heading & cold forging
18,000 t/y of cold-finished steel bars

[NBC Thai]
Business:   Manufacture & sale of steel wire for cold heading & cold forging
Establishment:   2006
Location:   Eastern Seaboard Industrial Estate, Rayong, Thailand 
Representative: Katsunori Nagase
Capital:   230 million bahts
Shareholder formation:  
Nippon Steel & Sumitomo Metal Corporation 28%; Matsubishi Metal Industry Co., Ltd. 14%; Miyazaki Seiko Co., Ltd. 14%; Sanyu Co., Ltd. 14%; Toyota Tsusho Corporation 12%; Metal One Corporation 10%; and Suzutoyo Seiko Co., Ltd. 8%
Total assets (as of the end of 2011):

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