Nippon Steel, Tata Steel to Meet Growing Indian Demand

Nippon Steel said on Tuesday the firm started talk with Tata Steel of India to meet growing steel demand for automobile and other applications in India. The firm said they decide anything so far and keeps talking potential tie-up depending on the demand. They try to serve growing demand for automobile and other usages when Japanese automakers expand the operations and Indian government supports development of the automobile industry. Nippon Steel tries to improve the global supply system of high valued flat steel eyeing potential local production base in one of the BRICs countries after the bases in Brazil and China. Nippon Steel and Arcelor provide technical support to Tata Steel in automotive flat steel. Nippon Steel also supports technically in select of facilities and layout design for Tata Steel’s new integrated steel plant in Orissa. Nippon Steel and Tata Steel try to expand the partnership further to meet growing demand mainly for automobile in India. Tata Steel’s raw steel output was 4.4 million tonnes in 2005. However, the firm decided to acquire Corus Group of UK with 18.2 million tonnes of raw steel output in 2005. Tata Steel also plans to expand the operations to 30 million tonnes by 2015 without Corus Group through new integrated steel projects. Indian automobile output was 1.31 million units for passenger vehicle and 390,000 units for commercial vehicle in fiscal 2005, according to Society of Indian Automobile Manufacturers (SIAM). The output increased by 22.9% for passenger vehicle and by 36.1% for commercial vehicle in April-February. With the growth rate, the output could reach 1.61 million units for passenger and 530,000 units for commercial in fiscal 2006. Indian government launched Automotive Mission Plan (AMP) through 2016 in January. The government expects maximum US$ 40 billion of investment in next 10 years could increase the automobile industry’s sales to 1.8 trillion yen, which is 4 times higher than now, through the support for infrastructure and export condition to encourage the development as export base.