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Mitsubishi Heavy Industries Ltd. said Wednesday it has agreed with Siemens AG of Germany to establish a joint venture for steel and metal production machinery next January to expand their product lineup and boost global presence.

The new company, to be set up in Britain, will be owned 51 percent by Mitsubishi-Hitachi Metals Machinery Inc., an MHI group company, and 49 percent by Siemens. Its CEO will be selected from the MHI group.

As the global iron and steel industry is likely to grow only slowly due to overcapacity in China, as well as increasing material costs and declining product prices, the companies are hoping to improve their business structures with the joint venture, MHI President Shunichi Miyanaga said at a news conference in Tokyo.

Miguel Angel Lopez, chief financial officer of the industry sector of Siemens, said at the news conference that the joint venture will have a strong combination of automation and supply systems as well as engineering expertise.

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