TOKYO: Mycron Steel Bhd has signed an agreement for a strategic tie-up with Japan’s JFE Steel Corporation (JFE Steel).
The agreement, which was inked on Feb 6, saw JFE Steel taking up a 3% stake in the Malaysian cold-rolled steel sheet manufacturer and allows the Japanese company to supply Mycron with hot-rolled coils and related technical assistance for the production of high-quality cold-rolled sheets.

According to a statement by Mycron, the cold-rolled sheets are to cater for markets such as automobiles and electrical appliances that have a more stable demand.

“The demand for high-quality steel is growing in Malaysia, where manufacturers are increasingly seeking local sources of high-quality industrial materials,” the company said.

At present Mycron produces and supplies cold-rolled steel sheets for automobiles, drum cans, construction materials and coil centres.

Mycron wants to increase its presence in the automobile industry and plans to start supplying substrate to electric galvanising mills for electrical appliances.

This is because the demand for cold-rolled steel sheets in the automobile and electrical appliances sectors is more stable compared to the cyclical construction industry.

Mycron’s current production capacity is 260,000 tons and expects to increase it to 500,000 tons per annum by 2012 with a planned commissioning of a new cold-rolled reduction mill.

Mycron was represented by its CEO Azlan Abdullah and JFE Steel by its senior vice-president Tsutomu Yajima at the signing ceremony.

The two companies have enjoyed commercial relations over the years, during which time JFE Steel has provided Mycron with technical assistance for the manufacture of automotive-grade steel products and also hot-rolled coils which are turned into cold-rolled sheets.

“The collaboration agreement and equity investment will enable the two companies to deepen this relationship for enhanced mutual benefit,” Mycron added.