Sumitomo Metal, Bhushan forms JV for Orissa project

Sumitomo Metal Industries, Japan's third-biggest steelmaker, will form a venture with Bhushan Steel to provide technical assistance for a plant being built in Orissa.

Sumitomo Metal, based in Osaka, would provide help for the 2.2 million metric tonne plant, Nittin Johari, a director at Bhushan, said in a phone interview. Sumitomo announced the plan in a statement on its Web site.

Bhushan's Orissa project includes a blast furnace, steelmaking facilities, and a hot strip mill.

Sumitomo Metal joins ArcelorMittal and Posco as overseas steelmakers attempt to expand their presence in India, which holds the world's fifth-largest iron ore reserves. Annual demand for steel in the South Asian nation might double to 100 million tonnes in five years, Credit Suisse Group said in July.

"Sumitomo Metal has provided technical assistance to Bhushan Steel and supplied it with steel sheets since 1997,'' the statement said.

"The alliance announced today is intended to deepen this relationship and give further impetus to Sumitomo Metal's strategy to grow its steel-sheet business.''

Sumitomo Metal would provide the assistance on an exclusive basis, the statement added.

Bhushan, based in New Delhi, sells almost 40 per cent of its 1 million tonnes of cold-rolled steel to auto companies, including Tata Motors and the local units of Ford Motor and Hyundai Motor, according to its Web site.

Bhushan, which has more than quadrupled this year, rose as much as 1.5 per cent to Rs 1,548.4 on the Bombay Stock Exchange, and traded at Rs 1,510 at 2:10 pm in Mumbai. Sumitomo Metal gained 1.5 per cent to end at 533 yen in Tokyo.