Nippon Steel, until now the fourth largest steel company in the world, will invest $66 million in the construction of an electrical steel sheet processing center for the automotive industry in the central Mexican state of Guanajuato. The start of operations is planned for April 2025, the company reported in a statement.
The formal construction ceremony was in January and the investment announcement was this week. It will be built in the city of Apaseo el Grande for the processing and sales of electrical steel sheet and other associated business. It will have a production capacity of 120,000 metric tons (mt) per year through four slitting lines.
The objective of the investment is to meet the anticipated demand for the production of electric vehicles in North America.
Nippon Steel's new investment is located in the same city as the Toyota production plant. Additionally, in Guanajuato there are the production plants of Honda (in the city of Celaya), Ford (Irapuato) and Mazda (Salamanca).
The electrical steel sheet processing center is done through the subsidiary Nippon Steel Trading, which in turn has the subsidiary Nippon Steel Trading Coil Center Mexico (NSTCCM). SteelOrbis sought the municipal promoter (Economic Development) of the investments in Apaseo El Grande to find out the potential employment to be generated, but there was no response.
Mexico, according to the International Organization of Motor Vehicle Manufacturers (OICA), is the seventh largest producer of vehicles in the world. According to Nippon Steel, the investment in Guanajuato contemplates "large-scale expansion."
In December of last year, Nippon Steel, Japan's largest steelmaker, agreed to purchase its American commercial rival US Steel (#27 in the world ranking) for $14.0 billion. If the purchase is completed, the Asian company will be the third largest steel producer in the world, only surpassed by China Baowu Steel Group and ArcelorMittal.