Nippon Steel & Sumitomo Metal Corp. recently completed its takeover of Ovako Group, the Swedish steelmaker and forger, a move it indicated would enhance its specialty steel business and give it new production capacity and sales networks in Europe.
The value of the sale and other terms of the transaction were not revealed by NSSMC or the private-equity fund Triton, which announced the sale earlier this year. Triton acquired Ovako in 2010.
Ovako has a capacity for 780,000 metric tons/year of stainless steel for bearings, transportation, and engineering applications. Its ring-rolling capacity is estimated at 30,000 metric tons/year — roughly 2 million rings annually.
Ovako is widely recognized as a producer of seamless cylindrical or profiled rolled rings (150-2,500 mm diameter, 5 to 2,500 kg) mainly for roller-bearing production but also for heavy equipment, automotive, and machine tool manufacturing. It also supplies forged rings up to 3,500 kg.
“Demand for special steel is expected to grow further with firm demand from the automotive, industry machinery and wind-power generation [sectors], so strengthening the special steel business [will] keep stable supply to customers,” according to a NSSMC representative.
The Swedish company will retain the Ovako brand and will be organized as a NSSMC subsidiary, the buyer indicated. NSSMC is expected to install management and engineering personnel.
“We are very pleased to now fully begin our journey as part of NSSMC,” according to Ovako president and CEO Marcus Hedblom. “For Ovako, the acquisition means that we now have a strong industrial owner in the global steel industry.”
The NSSMC Group manufactures a wide range of steel grades and products, with total production capacity of 45 million metric tons. It’s now in the process of incorporating Sanyo Special Steel (in which it holds a minority stake) as another subsidiary company.
The NSSMC representative indicated that Ovako and Sanyo Special Steel may collaborate to expand their respective special steel businesses.