Kawasaki Steel Corp. said Monday it has reached a final agreement with Hyundai Pipe Co. on a business tieup that includes technology transfers and Kawasaki's purchase of a stake of more than 10 percent in the South Korean steelmaker.
Under the agreement, the Japanese steelmaker will provide some 500,000 tons of hot-rolled coils per year to Hyundai Pipe, which is under the umbrella of Hyundai Motor Co., Kawasaki said in a statement.
Hot-rolled coils are used for production of cold-rolled steel products for auto bodies.
Kawasaki said it will also provide Hyundai with its cold-rolling technology for production of steel plates used in auto bodies and its technology for production of zinc-coated steel sheets.
Kawasaki said the latest business tieup is designed to help upgrade Hyundai's production of steel plates for use in automobiles and enable Hyundai to supply such products in a stable manner.
Kawasaki Steel plans to acquire a stake of more than 10 percent in Hyundai Pipe by the end of this year, a Kawasaki Steel spokesman said.
Kawasaki and Hyundai Pipe announced their agreement on the tieup in November but had not disclosed the details.
Kawasaki is believed to be aiming to strengthen its competitiveness against Nippon Steel Corp., which has a strong relationship with South Korean steelmaker Pohang Iron & Steel Co., industry analysts said.
While Kawasaki Steel has been expanding its ties with Japanese steelmaker NKK Corp., it is also in talks with Usinor Sacilor of France.