News Release (Sumitomo Corp.)
May. 22, 2012
Sichuan Southwest Stainless Steel Co., Ltd.
Nippon Steel & Sumikin Stainless Steel Corporation
Establishment of Joint Venture for Cold Rolled Stainless Steel Sheet in China
- NSSC to launch first production base abroad -
Nippon Steel & Sumikin Stainless Steel Corporation (Head Office: Chiyoda-ku, Tokyo; President: Hiroshi Kinoshita; hereinafter "NSSC"), Sichuan Southwest Stainless Steel Co., Ltd. (Head Office: Leshan City, Sichuan Province, People's Republic of China; Representative Director: Shengyi Zeng; hereinafter "Southwest"), a business division of Sichuan Jinguang Industrial Group Co.,Ltd. (Head Office: Guanghan City, Sichuan Province, People's Republic of China; President: Luwen Chen; hereinafter "Jinguang"), Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Susumu Kato), and Sumitomo Corporation (China) Holding Ltd. (Head Office: Beijing City, People's Republic of China; President: Nobuhiko Yuki, hereinafter "China SC"), a Chinese subsidiary of Sumitomo Corporation, have agreed to form a joint venture by the tentative trade name of J.S. (Nantong) Stainless Steel Co., Ltd. (planned head office site: Nantong City, Jiangsu Province; hereinafter "JSNS") for the purpose of manufacturing and distributing cold rolled stainless steel in China.
[Establishment of the Joint Venture]
Demand for stainless steel is expected to expand steadily in line with economic growth and the improvement of living standards. Overall, annual stainless steel demand in China has grown approximately five-fold to as much as around 11 million tons over the past decade. The Chinese market is now the largest in the world, accounting for more than 30 percent of the global demand. Driven by steady growth in GDP, stainless steel demand in China is expected to achieve consistently high growth going into the future. In addition, as requests by customers in China for high quality stainless steel have been growing year over year, the demand for highly functional and workable stainless steel sheet will become progressively stronger.
In order to meet the wide range of customer needs in China, NSSC, Southwest and Sumitomo Corporation have agreed to establish "JSNS" in Nantong City, Jiangsu Province, by the target month of August 2012.
■ Outline of J S (Nantong) Stainless Steel Co., Ltd.
・Company Name: J S (Nantong) Stainless Steel Co., Ltd. (tentative)
・Location : (Head Office) Nantong City, Jiangsu Province, People's Republic of China
(Factories) Nantong City, Jiangsu Province, People's Republic of China
・Main Business : Manufacturing and sale of high quality cold rolled stainless steel sheet
・Paid-in Capital : RMB 600 million
・Total Investment: Approximately RMB 1.5 billion
・Shareholders : NSSC: 25%; Southwest: 40%; Sumitomo Corporation & China SC: 35%
・Production Capacity: 200,000 metric tons per year
・Main Facilities : ZM cold rolling machines x 2;Cold annealing and pickling line (CAP) x 1
other ancillary facilities
・Number of Employees: Approximately 260 persons for production at full capacity
・Establishment : August 2012 (planned)
■ Business Schedule
・May 2012 : Conclusion of the agreement by and among the shareholders
・May through August 2012 : Authorization and permission to found JSNS
・August 2012 : Commencement of plant Construction
・June 2014 : Commencement of production
■ Planned plant location
[Business Profile of JSNS]
Through a combination of each partner's distinctive edge and by capitalizing on the strength of the hybrid cold-rolled stainless steel business, specifically, Southwest's cost competitiveness on high quality austenitic stainless steel for generic usage and NSSC's strategically differentiated product lineup that includes the NSSC FW® Series (Reference Data (iii)), along with Sumitomo Corporation's and China SC's sales and marketing capabilities and management know-how, we will establish and secure the firm presence of "JSNS" in the Chinese market.
The English abbreviation "JSNS" represents the initial letters of each shareholder, namely, J (Jinguang, a parent company of Southwest), S (Sumitomo Corporation) and NS (NSSC). At the same time, the initial J and final S stand for the locations of the shareholders' headquarters, namely Japan and Sichuan, respectively. Additionally, the Chinese company name J S (Nantong) Stainless Steel Co., Ltd, which contains Chinese characters pronounced as "JS," suggests the company's motto of "stainless that creates a wonderful world."
<Reference Data (i)>
■ Outline of Sichuan Southwest Stainless Steel Co., Ltd.
・Company Name : Sichuan Southwest Stainless Steel Co., Ltd.
・Location : (Head Office) Leshan City, Sichuan Province, People's Republic of China
(Factory) Leshan City, Sichuan Province, People's Republic of China
・Main Business : Manufacturing and sale of stainless steel
(Crude steel production capacity: 600,000 metric tons per year)
・Paid-in Capital : RMB 850 million
・Shareholders : Sichuan Jinguang Industrial Group Co., Ltd. (100%)
・Number of Employees: Approximately 1,500 persons
・Established : 2004
<Reference Data (ii)>
■ Outline of Sichuan Jinguang Industrial Group Co., Ltd.
・Company Name: Sichuan Jinguang Industrial Group Co., Ltd.
・Location :(Head Office) Guanghan City, Sichuan Province, People's Republic of China
(Factories) Leshan City, Sichuan Province, PRC, and others
・Main Business : Manufacturing and sale of raw materials for stainless steel (FeNi, FeCr),
power generation, and trading
・Paid-in Capital : RMB 915 million
・Shareholders : Mr. Luwen Chen, and other shareholders
・Number of Employees: Approximately 6,200 persons
・Established : 1990
<Reference Data (iii)>
■ NSSC FW Series
NSSC FW Series is the World's first low-interstitial ferritic stainless steel adding tin (Sn) to secure high corrosion resistance, which is the brand-new technology originally developed by NSSC and has been put out into the market in 2010. Not only can the technology achieve a reducing content of rare metals by a maximum of 40% comparing to conventional stainless steel, but it has good workability.
In February 2012, NSSC won the Prime Minister's Award, the top-grade prize in the 4th Monodzukuri Nippon Grand Awards.
Corporate Communications Department,
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