Steel manufacturers have been generally welcoming of the merger between Japanese steel works companies Nippon Steel and Sumitomo Metal Industries Ltd. They believe that the merger will help to improve competitiveness in the market whilst also setting a path for survival amid the rising strength of overseas rivals.

However there are still concerns over the effect of the merger on smaller Japanese stel companies, leading the Fair Trade Commission to be brought in to decide whether the merger can go through and thus create the fourth largest steel maker in the world.

Representatives of both companies have signalled that the merger is an “aggressive” move to help them compete globally, with statistics showing that around 40% of the steel produced by both companies being exported.

The companies now wish to move their operation overseas, especially in areas like India and other emerging economies.

Shoji Muneoka, president of Nippon Steel, said the deal will create a stronger financial base and enhance product development capabilities. He claims “We plan to produce and supply products in markets where there is demand. While existing facilities will be maintained, we do not envision expanding them for the purpose of exporting.”