Tata Steel today entered into an agreement with Nippon Steel for production and sales of autograde steel, becoming the third steel maker to tie up with a Japanese company in less than three months.
Tata Steel in a statement said the company board has approved the proposal for a joint venture with Nippon Steel. The joint venture will set up a 6 lakh tonne per annum production line at Jamshedpur which could become operational by 2013. Tata Steel will hold 51 per cent stake in the JV and the rest would be with Nippon.
For Nippon, the agreement will mark its first operational presence in the country, where global majors like ArcelorMittal and Posco are struggling to start their mega projects.
Analysts said Tata-Nippon tie-up mirrors the domestic steel makers' eagerness to increase their market share in the fast growing auto grade steel segment. With Indian automobile industry set to grow at a scorching pace in the short-term, the steel industry is gearing up to meet the raising demand, they added.
Besides Tata Steel, JSW Steel, Bhushan Steel have partnered with Japanese steel majors JFE Steel and Sumitomo Metals, respectively.
"The board today approved a framework for co-operation between Tata Steel and Nippon for production and sales of automotive cold-rolled flat products at Jamshedpur to address the localisation needs of Indian automotive customers."