Siemens and Mitsubishi Heavy Industries (MHI) are forming a globally operating complete provider for plants, products and services for the iron, steel and aluminum industry. The hope is to cooperate in the field of the metallurgical industry.
One reason for the partnership is in response to the challenging market environment and high price pressure. Both companies, strong individually will join their efforts to establish a powerful and globally well positioned joint venture.
While the technology strengths of Siemens Metals Technologies lie in particular in iron and steel production, casting, automation, environmental technologies and lifecycle services, MHI's technology competence is primarily focused on hot and cold rolling, processing as well as production expertise. By combining both portfolios, the joint venture can offer its customers the entire value chain in iron, steel and aluminum production, from technologies for processing raw materials to surface finishing at the end of the production process, as well as the related lifecycle service competencies.
According to the agreement, which coincidently has just been signed, MHI will hold a 51-percent and Siemens a 49-percent stake in the joint venture. Subject to approval of the relevant authorities, the joint venture will start operations in January 2015.
Both companies will contribute their metallurgical industry activities to the joint venture that will integrate Mitsubishi-Hitachi Metals Machinery, Inc. (MH) – an MHI consolidated group company with equity participation by Hitachi, Ltd. and IHI Corporation.
Siemens and MHI complement one another with their product portfolios, production know-how and geographical spread.
The partnership to date will include 9,000 employees who will focus fully on business with iron, steel and aluminum-producing industries.
The company's structure will be tailored to global market requirements and the international competitive environment. The hope is that the combination of competencies will result in a powerful joint venture that is better able to compensate for market fluctuations.
The company's headquarters will be located in the United Kingdom. The joint venture includes supply agreements for Siemens' Industry Automation and Drive Technologies Divisions.
Regionally, the steel market has strongly shifted to Asia. Over 50 percent of the world's steel production now takes place in China, with growing competition also through local technology providers. Drawing on the centers of competence of Siemens Metals Technologies in Central Europe and those of MHI in Asia, the partnership will have a very solid regional set-up.
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