Mexican metallurgical passions in North America

World leaders in the metallurgy industry have begun battling in Mexico for orders from automakers who have decided to expand production in the North American country. Mexico has signed a number of free trade agreements and attracts producers with cheap labor.

Posco, one of the largest steel companies in Asia, was the first to invest in this country. In turn, Nippon Steel & Sumitomo Metal, the largest Japanese concern, in collaboration with ArcelorMittal, wants to buy a plant in Mexico and catch up with Posco.

Guanohuato is a central Mexican state known as an area rich in silver mines. Now this place is becoming a base for car production - Japanese and American manufacturers have already built factories there. The Volkswagen Group corporation and a number of other European manufacturers took an interest in Mexico.

Mazda Motor began production in January this year, and now the plant receives 60 percent of its sheet steel from Posco, with the remainder sourced from Nippon Steel. Foreign metallurgists rarely get good orders due to the cohesion of business ties between Japanese companies.

Companies often come together to create innovative technologies. For example, Posco engineers have implemented an advanced technology that is used at the Mazda plant - the creation of 12 parts on one press in one procedure.

Posco's reputation in Mexico is growing, the company is increasing its turnover and has already opened 4 warehouses with sheet steel near the car factories. The South Korean company has already become "the most important partner" of Nissan Motor, which is about to open its new plant in Aguascaletes. Posco now produces 900,000 tonnes of steel annually in two plants, enough to build 1.8 million vehicles.

One of the largest steelmakers, Nippon Steel, is not going to lag behind, although it now produces half as much sheet steel.

Following global mergers and acquisitions in recent years, the pace of reorganization in the steel industry has slowed recently, but competition in Mexico will continue to grow.