Bangkok--5 Nov--Sahaviriya Steel Industries
On 31 October 2012, Sahaviriya Steel Industries Public Company Limited or “SSI”, JFE Steel Corporation or “JFE” and Marubeni-Itochu Steel Inc. or “MISI” signed PARTNERSHIP AGREEMENT.
JFE and MISI will invest USD25 million each (USD 50 million in total) in subscribing SSI new ordinary shares at the price of 0.68 baht per share under SSI’s Comprehensive Financial Plan.
JFE and MISI will increase its stake in the existing joint venture company, Thai Cold Rolled Steel Sheet Public Company Limited (“TCRSS”) by buying shares from SSI for the total amount of approximately USD 50 million. After completion of the deal, SSI and JFE will each hold 36.04% of the shares in TCRSS, and MISI 25.10%. Also, JFE will provide technical assistance, assist and transfer to TCRSS the necessary technology for producing stable supplies of cold rolled steel sheets to meet the growing demand of the Thai automotive industry.
In order to strengthen JFE-MISI-SSI business partnership, the three firms agree that JFE shall support SSI Group with continuous steel supply, which provides additional raw material stability for SSI.
In addition, JFE agrees to support SSI Group in the effort to continuously improve operational performance through technical cooperation.
The three firms foresee growing demand in the ASEAN market, especially in high grade steel sheet products for the automobile industry. The cooperation of SSI-JFE-MISI under the Partnership Agreement, will result in better products and services for the customers in the region. In the Thai market in particular, this partnership will lead to more localization of high grade steel sheet and add value to the customers and local industries.
Win Viriyaprapaikit, Group CEO and President of SSI, reveals that the Partnership Agreement deepens the strategic alliance and the commitment between the partners, which will result in better products and service for the customers.
"The first pillar of our growth is upstream integration, which started with the successful restart of SSI Teesside plant in the UK and is providing the raw material security to our business. The second pillar of growth is downstream integration - this business partnership provides us with the technology and access to the growing high-end market. We are fundamentally transforming our business to be able to better serve our customers and capture the opportunities in this growing Asean market."