BlueScope steel boosts its SE Asian manufacturing network.

BlueScope Steel (ASX: BSL) has purchased new steel coil treatment, galvanising and painting operations to add to its growing presence in South East Asia.

The Melbourne company’s Malaysian subsidiary announced it would pay $42 million to buy YKGI Holdings Berhad’s (YKGI) manufacturing facility in Klang, Malaysia.

The assets comprise a Push-Pull Pickling Line, Cold Rolling Mill, Continuous Galvanising Line and a Continuous Colour Coating Line and will form part of BlueScope’s joint venture operations in the region.

BlueScope and and Nippon Steel & Sumitomo Metal Corporation (NSSMC) operate in joint venture in SE Asia and the United States, bringing together BlueScope’s leading edge coated products such as Colorbond and NSSC’s financial muscle.

The partners said the “acquisition is consistent with BlueScope’s strategy to grow its coated and painted steel business and provides a cost-effective source of cold rolled feed to supply to NS BlueScope Malaysia.

“It provides options to further lower the cost of feed supply in other operations in the ASEAN JV and offers future growth potential via additional coating and painting capacity.”

The acquisition is subject to regulatory approvals and should be completed in early 2019.

BlueScope is a leader in coating and especially marketing of up market coated steel products, a fact recognised by NSSMC when it inked the JV in 2013.

The venture has more than 29 manufacturing plants in seven countries

Picture: YKGI Holdings/Pickling line.