Mumbai: Nippon Steel Corporation and Mittal Steel will continue their business partnership. This was decided at the first top-level meeting between the companies since Mittal''s takeover of Arcelor SA last month.

Lakshmi Mittal, CEO, Mittal Steel, and his Nippon Steel counterpart Akio Mimura met in Kyoto for discussions on the relationship between the two companies.

Nippon Steel has a five-year-old technology tie-up with Arcelor, as well as a co-operative arrangement with Mittal Steel in automotive steel sheet in the US.

Reports also said that Mittal and Mimura have also agreed to consider expanding their existing joint automotive steel business in North America, most likely by opening a new mill to boost output.

Nippon Steel, the world''s No 3 steel maker, is currently way down the production chart since Mittal''s takeover of Arcelor. A combined Mittal-Arcelor has annual sales of about $72 billion against Nippon Steel''s sales of about $34 billion

Nippon Steel and its allies are planning to raise their combined annual crude steel output to over 40-million tonnes by the end of March 2009 amidst realignment and consolidation in the industry. The Arcelor-Mittal alliance has taken the heat out of Asian steel production, creating a company with annual crude steel output of over 120 million tonnes.

Nippon Steel is also planning an alliance with Sumitomo Metal Industries to boost output growth to an annual 18 per cent in the next three years.

Meanwhile, a Nihon Keizai Shimbun report said, Mitsui & Co has announced the acquisition of ¥10-billion worth of shares in Nippon Steel Corp from the market, raising its interest in Japan''s largest steelmaker from 0.31 per cent to 0.65 per cent. Mitsui, the newspaper said, is planning to strengthen ties with the steelmaker as it expands its steel product distribution business.

However, it said the transaction is also widely seen as part of Nippon Steel''s efforts to secure stable shareholders to ward off any potential takeover amidst global mergers and acquisitions.