* YUSCO would be first Asian firm to buy a EU stainless mill
* EU Commission grants Outokumpu extra time for sale
By Silvia Antonioli
LONDON, Sept 19 Taiwan's Yieh United Steel Corp
(YUSCO) may join three other bidders for Outokumpu's Italian
stainless steel plant, sources said, in a move that would boost
its international presence.
The Acciai Speciali Terni (AST) plant, one of Europe's most
modern, has become available after Finnish stainless steel
producer Outokumpu offered to divest it to win
competition authority approval for its purchase of Inoxum, the
stainless steel arm of rival ThyssenKrupp.
Executives from YUSCO, one of Asia's largest
stainless steel producers, flew to Italy to inspect the Terni
mill last week, one of the sources said.
Should it beat the competition, YUSCO would be the first
Asian producer to buy a major stainless steel plant in Europe.
"It makes sense for YUSCO to buy the plant because Italy is
an important market for them and that way they can become more
powerful internationally," an industry expert said.
"It would be the first time that an Asian company buys a
main European stainless plant. It is significant step as it
shows where the centre of power is shifting."
YUSCO was not immediately available to comment and Outokumpu
declined to comment.
Outokumpu valued AST at over 500 million euros ($677.12
million) in its latest financial report, a spokesman said, but
it is now expected to sell for less than that due to weakness in
the global steel market.
The sale process has dragged on for almost a year as
Outokumpu, disappointed with the low offers obtained in the
spring, asked the European Commission for an extension to the
initial six months period it was granted to sell the plant.
A consortium led by Luxembourg-based steelmaker Aperam
, a company floated by ArcelorMittal in 2011,
together with Italian steel companies Arvedi and Marcegaglia,
was the only party to make a binding bid last spring and it
remains interested in the plant.
The other two parties in the race are JPMorgan's
private equity firm One Equity Partners and Apollo,
another private equity company.
But latecomer YUSCO might have strategic interest in
snapping up the Italian plant, which would make the Taiwanese
company less dependent on its domestic market, which is
suffering from oversupply and cheap imports.
"YUSCO is facing stronger competition from imports in its
domestic market and that is squeezing margins," CRU senior
analyst Mark Beveridge said.
"Like other Asian producers it is trying to expand its
customer base internationally, into South East Asia and Europe
as is seeks better margins."
The European Commission has recently granted Outokumpu
another extension to complete the sale, until the first quarter
2014, according to a source with knowledge of the situation.
The Finnish company however said it hopes the divestment
will be done by the end of 2013.
The Terni plant can produce up to 1.7 million tonnes of
steel a year and posted sales of about 2.5 billion euros in the
latest financial year.
YUSCO has a plant in southern Taiwan and also owns producer
Lianzhong Stainless Steel Corporation (LISCO) in China. YUSCO
and LISCO have combined output of about 2 million tonnes a year.