The Hindu Business Line : Tata Steel, Nippon joint venture for automotive steels on track

Plans ahead
If the venture fructifies, Nippon Steel would be the first Japanese company investing in India’s steel sector.
The domestic market for automotive steels was pegged at eight lakh tonnes per annum.

Ambar Singh Roy

Kolkata, Nov 16 The proposed joint venture between Tata Steel and Nippon Steel of Japan for manufacturing automotive steels for the growing Indian automotive sector is on track. Discussions to formalise things in this regard are under way.

However, no formal announcement is being made now in view of the Indian steel major’s ongoing rights issue of equity shares and cumulative convertible preference shares.

According to informed sources, a proposal to set up a joint venture for manufacture of cold-rolled automotive grade steel products has been under discussion for some time now. Only last month, the Chairman of the Tata Group, Mr Ratan Tata, held a meeting with the President of Nippon Steel, Mr Akio Mimura, in Japan to discuss prospects of the proposed joint venture.

When it fructifies, the joint venture will be Nippon Steel’s fourth such initiative outside Japan. Nippon Steel, the world’s second-largest steel maker, has sheet metal manufacturing facilities for automobiles in the US, China and Brazil. With the joint venture, Nippon Steel will also become the first among Japanese steel companies to set up shop in India.

The sources said the domestic market for automotive steels was pegged at eight lakh tonnes per annum. Of this, Tata Steel has a share of 45 per cent.

The auto sector in the country has been growing at 12-15 per cent per annum. This rate is expected to be higher in the months ahead given the aggressive expansion plans of several automobile manufacturers in India. Among the players in the Indian automotive sector are two Japanese companies, market leader in the passenger car segment Suzuki Motor Corp and Toyota Motor Corp.

In the past, Tata Steel has partnered with Nippon Steel for its one million tonne and 2.4 million tonnes growth plans as also for its cold rolled mill at the Jamshedpur Steel Works. Tata Steel also has an existing technical collaboration agreement with Nippon Steel for manufacture of cold rolled automotive steels. Technical assistance from Nippon Steel has also been obtained for the setting up of Tata Steel’s six million tonnes per annum capacity steel plant at Kalinganagar in Orissa.

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