Nippon Steel Corp. plans to build a new automotive sheet metal plant in the United States with Mittal Steel Co. in a move to expand ties with the world's largest steelmaker, officials at Japan's top steelmaker said Thursday.
I/N Kote, a 50-50 joint venture between the two firms based in Indiana, will build the new plant.
When it becomes operational in around 2008, it will substantially boost annual production of automotive sheet steel at I/N Kote from the current 500,000 tons, the officials said.
The output will be sold to meet brisk demand from Toyota Motor Corp. and other Japanese automakers operating in the United States.
Nippon Steel bought back a large block of its own shares last month to defend against a possible hostile takeover like the one Mittal launched against the world's No. 2 steelmaker, Arcelor SA of Luxembourg.
While apparently wary of Mittal's expansionary business strategy, Nippon Steel decided to join forces with Mittal, a Netherlands-based firm, in the United States, where the automotive sheet metal business is booming.
The talks on collaboration in the U.S. between Nippon Steel and Mittal were once suspended when Mittal was in the midst of its takeover battle for Arcelor. But Nippon Steel President Akio Mimura and Mittal Chairman Lakshmi Mittal met in July in Kyoto and confirmed their decision to maintain their tieup deal.
I/N Kote was set up in 1989 as a joint venture between Nippon Steel and Inland Steel Co. Mittal then acquired Inland Steel in 1998.