According to report, Japan’s largest steelmaker, Nippon Steel and Sumitomo Metals, said that the two companies will merge to become world’s second largest steelmaker.

The move will help the two companies on their global operation, especially in China and India, as well as other emerging countries, in which the demand for steel is increasing as the domestic demand keeps falling.

The new Nippon Steel & Sumitomo Metal Corporation (NSSMC) will have annual capacity of about 50 million tons, follows the world largest steelmaker ArcelorMittal SA.

The annual capacity will also be lifted up by about 70 million tons in the next five to ten years.