INDIAN STEEL COS FORM JVS FOR HIGH-VALUE AUTO-GRADE PRODUCTS

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TATA Steel’s decision to enter into a 51:49 JV with Nippon Steel Corp for the production and sales of automotive cold-rolled flat products at Jamshedpur marks the advent of locally produced high-value auto-grade steel in India. In the past two months, the domestic steel sector has seen JSW Steel and JFE Corp of Japan announce a broader alliance which aims, among other things, to collaborate on the manufacture of auto-grade steel. The tie-up will help JSW produce high-grade skin panels, now being imported, for cars and bikes.

Similarly, Sumitomo has also inked an agreement with Bhushan Steel for sourcing hot rolled coils (HRCs) from the latter’s new plant in Orissa. This will be processed into auto-grade steel and sold under Sumitomo brand name. Incidentally, Sumitomo supplies sheet metal to most Japanese auto makers including Honda, Mazda, Suzuki and Nissan. The Tata Steel-Nippon Steel JV will address localisation needs of Indian automotive customers for high-grade CR steel sheets. The two partners are planning to set up a continuous annealing and processing line (CAPL) with a capacity of 6 lakh tonnes. Nippon Steel will transfer its technology for producing high-grade CR steel sheet for automotive application, including skin panels and high-tensile steels. For Japanese steelmakers, the interest in local manufacturing in India is a hard-nosed business decision. By 2010-11, India is set to produce 2 million cars annually with an accent towards small cars.

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