Tata Steel is exploring the possibility of setting up a mega project in collaboration with the world's fourth largest producer, Nippon Steel Corporation of Japan.
"We have a longstanding relationship with Nippon Steel. The two companies are currently focusing their efforts on the proposal to set up a joint venture for a cold annealed automotive steel project in India. Any further co-operation may be part of an ongoing conversation in the future but no decision has been taken in that regard," a Tata Steel spokesperson said.
Earlier this year, the Tata Steel board approved a joint venture between Tata Steel and Nippon Steel for the production and sale of automotive cold-rolled flat products at Jamshedpur, Jharkhand, to address the localisation needs of Indian automotive customers for high-grade cold rolled steel sheet.
Tata Steel holds 51 per cent in the venture, while Nippon Steel has 49 per cent. "Discussions on the project are on. There are land issues," said a Tata Steel official.
The JV aims to capture the growing demand for high-grade automotive, cold rolled, flat products in India by setting up a continuous annealing and processing line with a capacity of 600,000 tonnes. Nippon Steel would transfer its technology for producing high-grade cold-rolled steel sheet for automotive application, including skin panels and high tensile steels.
The target for start of operations is March 2013.
As for the idea of a new mega project, "any of Tata Steel's greenfield projects can be converted into a joint venture," an industry representative said. Tata Steel has greenfield (new) projects in Orissa, Jharkhand and Chhattisgarh and will probably take the lead in Tata Metaliks' Karnataka project.
Nippon Steel, which has been looking to make inroads into the Indian market, has held talks with other domestic metals and mining companies as well. If the project with Nippon materialises, it would join its peers -- JFE Steel, Sumitomo Metal Industries, and Kobe Steel -- who are looking to participate in a steel market clocking in growth of about 10 per cent annually.
While JFE has forged an alliance with JSW Steel, Sumitomo Metal is in discussions with Bhushan Steel and Kobe Steel is exploring options with NMDC.