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No. 357, June 1999

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Japanese Companies in the US


LTV CORP.'s interest in converting Columbus, Ohio-based L-S II ELECTRO-GALVANIZING CO., which it equally owns with SUMITOMO METAL INDUSTRIES, LTD., from a producer of electrolytically galvanized steel sheet for the automotive industry to a supplier of hot-dipped galvanized sheet has strained the long-standing relationship between the two steelmakers. SMI reportedly did not believe that it had the technical expertise to contribute to a hot-dip operation. It consequently has agreed to sell its stake in L-S II, which began electrogalvanizing in 1991, to BETHLEHEM STEEL CORP. for an undisclosed price. The two American integrated steel mills will change the name of L-S II to COLUMBUS COATINGS CO. and launch production of hot-dipped galvanized and galvannealed flat-rolled steel in the fourth quarter. LTV and Bethlehem Steel also plan to form a steel-slitting and warehousing business called COLUMBUS PROCESSING CO. by taking over the assets of OHIO KANPOH STEEL INC. That Obetz, Ohio company, formed in 1991 by KANPOH STEEL CO., LTD. (55 percent) and SUMITOMO CORP., closed down in May. Despite the end of L-S II, Sumitomo Metal Industries and LTV will continue to run L-S ELECTRO-GALVANIZING CO., a Cleveland electrogalvanizing plant that they opened in 1986. SMI owns 40 percent of this firm.

SUMITOMO CORP. is gearing up to start marketing outside North America an ironmaking process commercialized by IRON DYNAMICS, INC. that produces a steel scrap substitute for use in electric arc furnaces. The trader received a license to the technology at the end of 1996. However, delays in completing IDI's first commercial plant, located in Butler, Indiana, held up the launch of its new business. With the IDI facility scheduled to go onstream this summer, Sumitomo's Chicago-headquartered IRON DYNAMICS PROCESS INTERNATIONAL L.L.C. is putting together a package of engineering, equipment and training services for the direct reduced iron process. It hopes to win three contracts from steel mills in Latin America and Asia over the next five years.

The loss of so much Japanese-owned semiconductor production capacity in the United States over the last 18 months or so had spillover effects on INTERNATIONAL LEADFRAME CORP. The Santa Clara, California subsidiary of MITSUI HIGH-TEC, INC. repeatedly scaled back production of integrated circuit leadframes before calling it quits. The company, which had been in business since 1980 and also did soldering and plating, has become a Mitsui High-tec sales office under a different name.

An exchange rate of ¥122=$1.00 was used in this report.aaaaaa

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