South Korea's third-largest steelmaker Dongkuk Steel Mill said Sept. 25 it has forged an alliance with Japan's JFE Steel Corp through cross-shareholdings and a technology transfer. Dongkuk said it will buy shares worth 10 billion yen (US$85.5 million) in JFE Holdings, the parent of the Japanese firm, while JFE Steel plans to raise its stake in Dongkuk to 15% from the current 4.09%.
JFE Steel will also supply Dongkuk with its advanced steel plate technology for a planned works at Dangjin, 94 miles southwest of Seoul. JFE in return will secure Dongkuk as a long-term client for its slabs. Dongkuk said it will invest 760 billion won (US$803 million) in the facility, which will have annual steel plate production capacity of 1.5 million tons upon completion in 2009. The plant will raise the firm's total annual steel plate capacity to 4.1 million tons.
The alliance is part of a joint effort to counter a global reshuffle in the steelmaking industry, which shifted into high gear earlier this year when Mittal Steel of the Netherlands, the world's largest steelmaker, purchased Arcelor Luxembourg. Steelmakers here worry the Asian market could be the next stage of the global reorganization. Japan's Nippon Steel and South Korea's POSCO, the world's second- and third-largest steelmakers by output, forged a partnership based on a cross-shareholding arrangement in 2000. There have been in talks to strengthen their ties.
Copyright Agence France-Presse, 2006