Mar 7 2006
Hitachi Metals, Ltd. and Daido Steel Co., Ltd. today reached an agreement to form a comprehensive business alliance primarily in the specialty steel field.
1. Background
Both companies are engaged in the manufacture of specialty steel, an important product that underpins industrial infrastructure and from which a high degree of reliability is required. With the further globalization of business and increasingly stringent customer demands for high quality products, greater business efficiency and development speed both in Japan and abroad are needed in the specialty steel industry. At the same time, international competition is expected to heat up, and it is becoming more essential to concentrate management resources on maintaining and bringing manufacturing skill and capability, the foundation of the business, to a higher level.
The two companies have formed this business alliance in order to respond to the intense competitive environment expected in the future. The companies aim to mutually enhance business efficiency through effective utilization of both companies’ management resources, and to further strengthen their competitive position in the international arena.
2. Content of Business Alliance
- Mutual original equipment manufacturing (OEM) supply by efficiently utilizing upstream production facilities
- Joint development with the goal of enhancing manufacturing technologies
- Stable and efficient procurement of raw materials, resources and equipment
Additional areas and items may be added to the scope of the alliance in the future in the event that merit is perceived for both companies and both parties are able to mutually agree on terms.
3. Mutual Share Acquisition
To deepen mutual trust and cooperation, and to facilitate a smooth alliance, the two companies have agreed to purchase each other’s shares, an amount equal to 1% of total shares in the first stage of the alliance.