A money-losing KYOEI STEEL, LTD. sold its 88 percent interest in the holding company that owns AMERISTEEL CORP. to Brazil's GERDAU S.A. The Osaka minimill operator bought the Tampa, Florida-headquartered company, the number-two U.S. maker of reinforcing bar and a supplier of other finished steel products for construction and industrial markets, in late 1992. AmeriSteel has four minimills and 21 downstream processing plants. Its sales run around $600 million a year. The terms of the transaction were not disclosed, but industry analysts guessed that Kyoei Steel got at least $300 million for its majority share.
In a deal that dated back to August 1995, KAWASAKI STEEL CORP. sold 3 million of the 8.5 million shares that it owned in integrated carbon steel manufacturer AK STEEL CORP. at a fixed price. The sale, which trimmed the big Japanese steel mill's share to 9.2 percent from 14.4 percent, raised $29.2 million. KSC's ties to AK Steel go back to 1989 when it acquired a 45 percent interest in ARMCO INC.'s spun-off integrated carbon steel works in Middletown, Ohio and Ashland, Kentucky. The maker of flat- rolled products went public in 1994, adopting the AK Steel name in the process. At that time, KSC ended its managerial involvement in the company. Interestingly, AK Steel, one of the few generally profitable U.S. integrated steelmakers of late, has an agreement to buy Armco, which, after the divestiture of its carbon steel mills, became a Pittsburgh-headquartered producer of stainless steel.
USS/KOBE STEEL CO. now is a much smaller company. Under a previously announced deal (see Japan-U.S. Business Report No. 356, May 1999, p. 6), equal owners KOBE STEEL, LTD. and USX CORP./U.S. STEEL merged the Lorain, Ohio company's steel bar operations with those of BAR TECHNOLOGIES, INC. and REPUBLIC ENGINEERED STEELS, INC., both of which are controlled by an affiliate of merchant banker BLACKSTONE GROUP. Kobe Steel and USX each have a 15 percent interest in REPUBLIC TECHNOLOGIES INTERNATIONAL, INC. Their seamless pipe business, also located in Lorain, is excluded from the merger.
Hot-dipped galvanized steel sheet maker PRO-TEC COATING CO. of Leipsic, Ohio, another equally owned venture between KOBE STEEL, LTD. and USX CORP./U.S. STEEL, is marketing its Japanese parent's high-tensile steel sheet to Japanese- owned automotive makers in North America. Thin yet strong, high-tensile steel sheet resolves two conflicting demands on vehicle producers: decreasing the weight of their products while improving crashworthiness. In Japan, about 20 percent of the steel now used in cars and light trucks is of the high-tensile variety. Kobe Steel projects that this ratio could reach 40 percent in the 2003 model year despite the greater cost of high- tensile steel sheet.
The engine cylinder heads and other custom aluminum castings that BODINE ALUMINUM, INC. makes for parent TOYOTA MOTOR CORP.'s North American assembly facilities increasingly will be produced from secondary aluminum now that next-door neighbor MOST, INC. is nearing full production. Troy, Missouri-based MOST which is owned by DAIKI ALUMINUM INDUSTRY CO., LTD. (45 percent), Japan's top supplier of secondary aluminum products, and trader TOYOTA TSUSHO CORP. (55 percent) began trial remelting operations last December. At capacity, it will be able to turn out close to 60,000 tons of recycled aluminum a year, using all of the scrap produced by Bodine and other Toyota-affiliated parts makers. MOST will deliver the secondary aluminum to Bodine as molten metal rather than in ingot form to save remelting costs. The parts manufacturer recently invested $80 million to add a line for cylinder heads. Beginning in 2000, Bodine will be able to make 780,000 units a year compared with 480,000 now.
MODEC INTERNATIONAL LLC a Houston-headquartered supplier of floating platforms for oil and gas drillers that is owned by MITSUI ENGINEERING & SHIPBUILDING CO., LTD., an affiliate and FMC CORP. has won a contract to build a deepwater tension leg platform in the Gulf of Mexico off the coast of Louisiana for LEVIATHAN GAS PIPELINE PARTNERS LP. The job will be the first implementation of MODEC's MOSES TLP concept. MOSES is a flexible, low-cost platform designed for deepwater applications that takes just a year or so to erect rather than the traditional two years. It currently can support a deck and topside facilities weighing up to 6,000 tons with legs that extend down to water depths of 6,000 feet.
An exchange rate of ¥113=$1.00 was used in this report.aaaaaa