In the absence of any domestic production, India has accorded approval to Japanese steel maker Nippon Steel Corporation for supplying value-added CRGO steel, used mainly in the manufacturing of power transformers, to an estimated $2 billion domestic market.
“Nippon Steel Corporation had earlier applied to supply CRGO steel in India. A licence has been granted in-principle in respect of its Hirohata Steel Works. Once it send the fees, licence will be promptly despatched to them,” a senior steel ministry official told PTI today.
Nippon Steel's domestic peer JFE is the only other firm that has been supplying CRGO into India for quite some time now. CRGO is a value-added steel and a critical input for the making of distribution transformers used in the power sector.
“With this, two foreign manufacturers — JFE, Japan and Nippon Steel Corp, Japan — will now be able to supply CRGO to India,” the official added.
India's CRGO market is currently pegged at around two billion dollars and the future growth of the product is linked with the spurt in the power sector.
No Indian steel maker currently produces this variety of steel. They don't have the required technology too. State-run steel manufacturer Steel Authority of India had been talking to a couple of Japanese steel makers to forge a tie-up for making CRGO steel in the country. However, no development has taken place so far.
Production of such products would have enabled SAIL to increase margin and help consumers get them at a cheaper rate.
However, apart from SAIL, many other domestic players are also on the look out for forging similar kind of tie-ups for making CRGO steel, a senior executive at a public sector steel firm said.