Nippon Steel Corp. and South Korea's Pohang Iron & Steel Co. (Posco) announced Wednesday that they have signed a contract forming a strategic business alliance.
The world's No. 1 and No. 2 steel producers said their partnership will raise their self-imposed ceiling on mutual cross-shareholding to 3 percent from the 1 percent agreed to in 1998.
The two companies said they will soon set up a joint panel to explore how they will cooperate. They said possible areas of cooperation include basic research and development, joint ventures in third countries, and information technology development.
Nippon Steel, based in Tokyo, is capitalized at 419.5 billion yen and has a workforce of 19,800. It recorded sales of 1.8108 trillion yen in the business year that ended in March.
POSCO, based in Pohang, is capitalized at 482.4 billion won and has 19,500 employees. It posted sales of 10.6961 trillion won in the business year that ended last December.
The two firms had a combined annual production capacity in 1999 of more than 50 million metric tons of crude steel, equal to 7 percent of the world's total.