WCA March 2007

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From the Americas
30 Wire & Cable ASIA – March/April 2007
the importance of emergency planning. “Global tele-
communications cannot be underestimated,” he told
Einnews. “Everything from billions of dollars in international
trade to personal communication is silently carried by our
industry. When we go dead, the world goes dead.”
Elsewhere in telecom . . .
In the last quarter of 2006, shares of Motorola Inc – the
world’s second-largest mobile-phone maker – dropped
the most in more than four years. The Schaumburg,
Illinois-based company had introduced cheaper phones
in China and India to meet competition from companies,
including market leader Nokia Oyj, hurting Motorola
profit. Nokia, of Finland, is China’s top handset seller,
with a market share of 36.6% in the third quarter,
as compared with Motorola’s 23.3%, according to
researcher IDC. China is the world’s largest mobile
phone market by number of users.
The networking and communications technology
company Cisco Systems, Inc (San Jose, California)
expects to triple its employees in India, from the current
2,000, in three to five years. John Chambers, Cisco’s
chief executive, said in December last year that half
of all future growth in the workforce would come from
India and that the company was considering setting up
a manufacturing plant there. Cisco said it had dedicated
more than $750 million of the $1.1 billion investment
announced in 2005 toward research and development
and training in India.
Steel
Fewer steel exports from China
may ease trade friction with the US
Steel exports from China, supplier of one-third of the
world’s steel, could drop as much as 23% in 2007 – to
40.1 million tons from 52.1 million tons last year – as a result
of government cuts in tax incentives, according to the China
Iron and Steel Association. Lower steel exports would help
trim China’s growing trade surplus with the US, a source
of chronic friction between the two countries. In October,
the last month for which figures are available, the Chinese
sold a record $24.4 billion more goods to Americans than it
imported from them.
China, which makes more steel than the US, Russia,
and Japan combined, has since 2004 tightened up on
bank loans and shut mills to rein in capacity growth. Even
so, a near-doubling of steel exports last year intensified
concern in the US that China is unfairly aiding producers
with subsidies, tax breaks, and a weak currency – charges
denied by Chinese officials. “China’s rising steel exports
were purely a result of market demand,” Wang Shouwen,
foreign trade director at the Ministry of Commerce, told
Bloomberg News (20th December) in Beijing. “[In 2007] China
will continue to discourage the exports of low value-added
products.”
Mr Wang said that more talks with the US on steel export
issues were planned for the first half of the year. China,
which became a net steel exporter only in 2005, has held
nine rounds of such talks with South Korea, 11 with Japan,
and two with the United States.
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Barriers to high-grade steel imports
are dropped by the US
In a victory for US and Japanese auto makers, federal
trade regulators revoked most of the tariffs and duties on
imports into the US of the carbon steel used in cars. The
14th December vote of the International Trade Commission
(ITC) put an end to tariffs and duties on corrosion-resistant
steel sheet imported from Canada, France, Australia, and
Japan. Only steel from Germany and Korea will continue to
face the duties, imposed since 1993.
DaimlerChrysler, Ford Motor, and General Motors had joined
the Japanese auto makers Honda Motor, Nissan Motor, and
Toyota Motor in seeking an end to the tariffs. They claimed
to have been hit with $3 billion in additional costs since
2004 because of steel prices rendered artificially high by the
barriers to imported steel.
The ITC action offers the promise of help for the struggling
US auto industry and manufacturers in many other industries
that use steel. But it was not welcome news to US steel
makers, who say the tariffs helped stem the dumping of
low-priced and subsidised imports that almost destroyed
the domestic steel industry in the 1990s.
Nucor Corp (Charlotte, North Carolina) said on
2nd January that it had agreed to acquire the Harris Steel
Group, of Canada, for $1.07 billion. Already the second-
largest American steel producer, Nucor operates mini-
mills in 18 states across the US and has been seeking
to broaden its scope. Its relationship with the Canadian
steel maker dates to 2004, when Nucor paid $21 million
to acquire a 50% stake in Harris’s 11 reinforcing steel
products operations in the United States. Harris, based
in North York, Ontario, also has 23 plants in Canada. On
completion, the deal will be the biggest-ever for Nucor.
First acquisition for Arcelor Mittal is a
Mexican steel company
The European steel makers Mittal Steel Co NV (Rotterdam)
and Arcelor SA (Luxembourg) announced on 20th December
last year that they had bought Mexico’s Sicartsa from Grupo
Villacero for $1.44 billion. As well as an integrated steel
plant, a mini-mill, and two rolling mills in Mexico, the deal
includes the acquisition of the mini-mill Border Steel Inc
(Vinton, Texas).
Mittal is in the process of completing its $33.4 billion
acquisition of Arcelor. The combination, due to be
completed by April or May, establishes Arcelor Mittal as a
giant with close to 10% of global steel production.
The companies said their combined forces in Mexico would
lead to the creation of Mexico’s largest steel producer,
with an annual capacity of 6.7 million tons. Besides the
acquisition of Sicartsa, Arcelor Mittal also enters into a 50-
50 joint venture with Grupo Villacero to distribute its long
steel products in Mexico and the southwestern United
States.
Sicartsa had revenue of $956 million in 2004, but its sales
were curtailed by a labour strike that halted production for
46 days in 2005 and for four months of 2006. Border Steel
had 2005 sales of $110.8 million.
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