Nippon Steel Corp., Japan's largest steelmaker, said Monday it will invest $300 million in Thailand to produce high-grade steel used in automobiles to meet rising demand in the largest auto market in Southeast Asia.
The company will build a plant in Rayong Province, southeast of Bangkok, to produce 360,000 metric tons of galvanized steel a year, Tokyo-based Nippon Steel said in a statement. The plant, beside that of its Thai unit, Siam United Steel, will start operations in 2013, the company said.
Automobile production in Thailand will likely increase at an annual pace of 5 percent to 6 percent to about 2.3 million units by 2017, Nippon Steel said. Nippon Steel and other Japanese steelmakers, including JFE Holdings Inc., are expanding operations in China, India and other parts of Asia outside their stagnant home market.
"We had taken a wait-and-see stance after the Lehman shock caused a decline in demand, but we now see a steady recovery," said Shinichi Nakamura, general manager at the steelmaker's automotive flat products marketing department.
In 2010, a total of 1.64 million vehicles were produced in Thailand, for which about 700,000 tons of galvanized steel were used, Nakamura said.