Nippon Steel to liquidate Malaysia subsidiary producing steel plates for electric appliances
KUALA LUMPUR, NNA – Major global steel maker Nippon Steel Corp. is set to liquidate a financially troubled subsidiary in Malaysia that produces steel sheets for electric appliances.
Japan’s leading steelmaker will disband the affiliate in Penang, Nippon EGalv Steel Sdn. Bhd., by the end of this year after it stops manufacturing electro-galvanized steel sheets (EG) in June, a spokeswoman at the Tokyo-based company told NNA on Tuesday.
After ending its local production of EG in Malaysia, Nippon Steel will supply the material made at its ironworks in Chiba and Hyogo prefectures in Japan to Malaysian customers, mainly television and audio equipment manufacturers.
Nippon EGalv Steel’s profits have been deteriorating in recent years as the demand for EG has remained sluggish and price competition with South Korean and other competitors has been intensifying.
Nippon Steel and Hanwa Co. acquired 10 percent and 15 percent, respectively, of the voting shares in Nippon EGalv’s predecessor, E-Galv Steel Industries Sdn. Bhd. affiliated with the Malaysian stainless steel maker Tatt Giap Group Bhd. in 2009. E-Galv Steel was then renamed Nippon EGalv.
In 2011, Nippon EGalv became a consolidated subsidiary of Nippon Steel after the Japanese steel giant increased its stake in the affiliate to 50.1 percent. At the time, Hanwa also raised its stake to 22.78 percent.
Nippon Steel also acquired the local steel materials maker YKGI Group’s production unit in 2019 by establishing a 50-50 joint venture in Malaysia with Australian steelmaker BlueScope Steel Ltd. to manufacture cold rolled steel sheets for construction materials.
Nippon EGalv, headquartered in Perai in the northwestern state of Penang, has a capacity to produce 120,000 metric tons of EG and approximately 160 employees.
The current Nippon Steel was established in 2012 as Nippon Steel & Sumitomo Metal Corp. through a merger between the original Nippon Steel and Sumitomo Metal Industries, Ltd. and was renamed Nippon Steel in 2019.