JFE Steel Corporation said it has signed an agreement with its strategic partner JSW Steel to provide technology for the production of automotive steel in India.
JSW Steel is setting up a 2.3-million-tonne a yera cold rolling mill complex to manufacture high-grade automotive steel at its Vijayanagar plant in Bellary.
The project, which is estimated to cost Rs 4,500 crore, is expected to go on stream by March.
JSW Steel operates a 10-mt a year steel plant in Bellary. JFE Steel holds 15 per cent stake in JSW.
The automotive steel is used to make the body parts of passenger cars.
The auto grade steel is largely imported. India requires about 6-8 mt a year of automotive steel.
On Monday, JFE said in a press release that it would provide assistance to develop various grades of steel, including steel for external panels for automobiles in high strength viz JFE-Hiten, Jaz, zinc-coated steel sheets with lubrication and so on, to meet demands from automakers with production bases in India.
Besides providing technical assistance for 2.3 mt a year cold rolling mill, JFE will also assist in 1.9 mt a year continuous annealing lines and 400,000 tonnes a year continuous galvanizing line.
JFE is one of the large suppliers of steel to Japanese automobile companies such as Toyota Motor Corporation and Nissan Motor Company.
JSW Steel need not go through the entire process of qualifying to supply steel to these companies in India since it will be using JFE’s technology, said an analyst.
JFE Steel would also strive to leverage its strategic collaboration with JSW Steel in providing steel products and pursue its growth strategy in the Indian automotive steel sheet market, JFE said in the press release.