Nippon Steel Corp. and Sumitomo Metal Industries Ltd. said Friday they have signed an agreement to spin off their stainless steel businesses and integrate them under a joint company.

The new firm, Nippon Steel Sumikin Stainless Corp. (NSSC), will be established Oct. 1 with capitalization of 5 billion yen.

The integration, which Nippon Steel and Sumitomo Metal agreed to at the end of last year, is aimed at streamlining the firms’ manufacturing, management and marketing operations.

NSSC will have a workforce of some 1,300 and will produce stainless steel products at an annual rate of around 1 million tons. Annual sales are projected at 150 billion yen.

Based in Tokyo, NSSC will allocate 80,000 common shares to Nippon Steel and 20,000 to Sumitomo Metal. It will thus be owned 80 percent by Nippon Steel and 20 percent by Sumitomo Metal.

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