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No. 350, November 1998

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American Companies in Japan


METALS AND FABRICATED PRODUCTS

TITANIUM METALS CORP., one of the world's largest integrated producers of titanium metal products, has formed strategic alliances with two Japanese companies in the same business. The most far-reaching of the deals involves TOHO TITANIUM CO., LTD. It is designed in general to expand the market for titanium products and in particular to promote the development of lower-cost production techniques that will enable titanium to compete better with less-expensive materials. Specifics of the TIMET-Toho Titanium arrangement include the formation of a hearth-melting joint venture in Japan at some unspecified time; a long-term agreement under which the Kanagawa prefecture-headquartered partner, a leading titanium sponge and ingot supplier, will become a key outsider provider of high-purity, super-purity and premium- grade titanium sponge to TIMET; and mutual technology and business development support. Moreover, Denver-based TIMET will acquire up to 10 percent of the outstanding shares of Toho Titanium. Initially, it will purchase a 5 percent stake by buying stock now owned by NIPPON MINING & METALS CO., LTD. and MITSUI & CO., LTD. Together, they have a 54.8 percent interest in Toho Titanium.

Equally important, TITANIUM METALS CORP. has teamed with NIPPON STEEL CORP. to build the market for architectural titanium products by developing lower-cost, higher-quality products. TIMET brings to this job its electron-beam melting technology, while NSC, which is a major producer of titanium products as well as the world's biggest steelmaker, will contribute its finishing capabilities. As a first step, Nippon Steel will provide conversion services for its new partner, making high-quality, finished architectural cladding products from materials supplied by TIMET. These products will be marketed through the American company's worldwide distribution network under the TIMET name.

An exchange rate of ¥121=$1.00 was used in this report.
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