The leading Japan-based steel producer, Nippon Steel Corp., has reportedly unveiled plans to bolster its overseas operations, aiming to benefit from the company’s international expansion, given that it has been facing expansive demand at the domestic level.
The new President at Nippon Steel, Eiji Hashimoto, recently claimed that the company’s investment in Essar Steel in India, which is the fastest-growing market around the globe, is expected to be one of the key projects this year. He added that the investment is a big one, while the deal is the result of a bargain. The deal also provides Nippon Steel with access to India, which is a country that restricts the entry of foreign companies, given the ‘Make In India’ policy that is known for imposing safeguard duties on several steel imports.
Sources stated that Essar Steel India creditors had sanctioned a joint offer by Nippon Steel and ArcelorMittal in October, for acquiring the debt-laden asset, as the two companies have been planning to double the unit’s output in the forthcoming years.
For the record, 63-year-old Hashimoto, endowed with a commendable experience overseas, has taken control of the third-largest steelmaker in the world, from the 1st of April 2019 and has also changed its name to Nippon Steel, from NSSMC (Nippon Steel & Sumitomo Metal Corporation).
Nippon Steel has invested overseas earlier as well, including the acquisition of Sweden’s Ovako in 2018, which manufactures specialty industrial steel. Reports further state that Nippon Steel is threatened by its Chinese rivals who have consistently been enhancing and upgrading their technology. Moreover, China is often cited as the top global producer of steel.
As per certain market analysts, the more important challenge for Nippon Steel currently is to solve the problems or shortfalls at its domestic plants. The company was recognized as the world’s best in terms of market capital, which has now reduced to $16.8 billion, overpowered by peers such as Posco at $19.4 billion, ArcelorMittal at $20.3 billion, Nucor at $17.5 billion, etc.