Japan's second-largest steelmaker, NKK Corp agreed with two other Japanese firms to consider future integration of their steel plant operations in a bid to combat severe competition. The alliance with heavy electric machinery maker Sumitomo Heavy Industries
Ltd. and heavy machinery maker Hitachi Zosen Corp
. was prompted partly by the emergence of giant overseas rivals, the three companies said.
As the first step of the alliance, the companies will set up a joint venture in March, capitalized at $1.74 million, for sales of a variety of heavy machines used in the steel-making process to the domestic and overseas markets.
The new company, which plans to launch operations in April, will be owned 34 percent by NKK, 33 percent by Sumitomo Heavy and 33 percent by Hitachi Zosen.
NKK Corp said last month it was in talks with German steel and engineering giant ThyssenKrupp AG to broaden their alliance in the face of a growing number of tie-ups in the steel industry worldwide. Japan's industry leader, Nippon Steel Corp, announced last month it had agreed with French steel group Usinor to cooperate in certain key business areas in a bid to extend their geographic reach and cut costs. - (Reuters)