Steel major Tata Steel on Friday joined hands with the world’s second-largest steelmaker, Nippon Steel, for a new specialised steel making line at Jamshedpur.
The new steel line, which would entail an investment of around R2,300 crore, aims to cater to the steel demand of the country’s auto industry. It would have an annual production capacity of around 60,000 tonnes and would be operational by 2013.
“Tata Steel will hold 51% and Nippon Steel will hold 49% of equity capital in the joint venture company,” Tata Steel said in a statement to the Bombay Stock Exchange. The statement added that the said steel project (continuous annealing and processing line) would be set up at a capital cost of around
R2,300 crore that is expected to come on stream in a span of three years. The joint venture (JV) will address the localisation needs of Indian automotive customers for high-grade cold-rolled steel sheet and meet the needs of the growing domestic automotive industry.
The joint venture company is expected to be incorporated within one month. The chairman of the JV company will be nominated by Nippon Steel and the managing director will be nominated by Tata Steel.
The steel plant would source steel from Tata Steel’s Jamshedpur plant and use technology from Nippon Steel to produce high-grade cold-rolled steel sheet.
The domestic auto industry has been growing annually at 30% and is the second-fastest growing market after China. The industry is projected to emerge as the second-largest automobile market in the world by 2015. Other steel companies including Jindal South West and Steel Authority of India Ltd are also eyeing the buoyant automobile market.