Nippon Steel makes $763 million acquisition of 2 Thai steelmakers

Japan is making a move to invest in Thai steel. Nippon Steel Corp, the largest manufacturer of steel in Japan has announced a strategic deal to buy stakes in two major steelmakers in Thailand. The deal is reported to be worth as much as US $763 million – about 25 billion baht.

The giant steelmaker has been interested in acquqiring G Steel and GJ Steel, the two Thai companies in the purchase deal, as they utilise a different technique to produce their steel. The Thai businesses use electric arc furnaces, which creates liquid steel out of scrap steel buy using high-current electic arcs.

Nippon Steel’s factories in Japan use coking coal in a blast furnace to create their steel. This method uses hot combustion air blown through a furnace to smelt the steel into molted metal, fueled by the special type of coal to create the heat. The process is not terribly eco-friendly, as it emits polluting carbon dioxide as a byproduct of the smelting.

Nippon Steel will first invest about US $300 million to buy a stake in each company as a path to move towards cleaner and more environmentally responsible steel production. The Japanese company revealed in November that they see the market growing and so they are also searching for options in Southeast Asia to puchase a steel mill that could support their factories with resources for making iron.

SOURCE: Bangkok Post