Kobe Steel to Launch Rubber Processing Machinery JV in India

Kobe Steel announced on Tuesday the firm established joint venture with Indian largest engineering company, Larsen & Toubro to make rubber processing machinery including rubber mixers and twin screw rollerhead extruders. The total investment is around 900 million yen. They secure the land in February to start construction work. The venture starts operation in October 2011 targeting US$ 45 million in 2014.

They established the joint venture, L&T Kobelco Machinery with 500 million rupees of capital in November 2010. Larsen & Toubro controls 51% of the venture with 49% share by Kobe Steel. The venture has annual production capacity at 30 units of rubber mixers and 25 units of twin screw rollerhead extruders. The plant tries to realize full capacity operation as soon as possible. Kobe Steel sends 2 engineers for the venture.

The demand surges for tire and rubber making machinery recent years when automobile production increases mainly in emerging countries. The estimated world demand is US$ 325 million for rubber mixers. Kobe Steel tries to follow the growing demand through strategic partnership with Larsen & Toubro while Kobe Steel has built good relationship with the Indian major through technology support contract for tire curing press in 2003.

Larsen & Toubro with 435.1 billion rupees of annual sales in fiscal 2009 is technology, engineering and construction company. The firm is Indian top maker of tire curing presses and has global sales network in Europe and Middle and Near East along with Indian domestic network.

Kobe Steel utilizes the network to sell the machinery in India, Europe, Middle and Near East, Africa, Russia and East Europe. Kobe Steel targets 50-70% Indian market share in future compared with current 5% share.

Kobe Steel’s tire and rubber machinery business unit establishes 4 major production bases including Takasago works in Japan, Kobelco Stewart Bolling in USA and Yiyang Yishen Rubber Machinery in China. The group tries to meet the users’ demand by providing same quality of products from the each plant while the group tries to develop India and western part of the world to improve the presence when the firm already has world 50% share for rubber mixer. The firm also eyes expansion of the Chinese operation.