Nippon Steel to Launch Automotive Steel Pipe Plant in India

Nippon Steel announced on Tuesday the firm builds steel pipe making plant with monthly 2,000 tonnes of output capacity in India for around 1.5 billion rupees to serve automobile and motorcycle industry. The firm starts the cutting service in 2012 and the pipe making operation plant in 2014. The plant is the first plant to make steel products in India and 4th pipe making offshore plant after Thailand, Indonesia and China. The firm tries to expand the offshore business through the global network for automobile industry.

The firm starts of the construction work in early 2011 to build the new plant with 100,000 square meters of land in Neemrana Industrial Park in north of Rajasthan, India. The firm tries to establish short lead time delivery service for high grade pipe to transplants of Japanese automakers and automotive parts makers in Haryana where many Japanese makers have plants and near to the new plant.

The firm established Nippon Pipe India Private Limited with around 700 million rupees of capital. Nippon Steel’s Thai steel pipe making subsidiary, Siam Nippon Steel Pipe (SNP) controls 98% of the new company with 2% share by Toshida Kogyo.

The new plant starts operation of heat treatment and cutting process in January 2012 to process monthly 800 tonnes of pipe from SNP. The new plant starts operation of 3 inch electric resistance welding line and cold drawing line in 2014 to establish integrated operation from pipe making and drawing to heat treatment and parts processing. Toshida Kogyo provides technical support for the downstream operations. SNP’s president Teruhisa Takamoto assumes president of the new company with 300 employees.

Japanese major automakers including Suzuki Motor have many plants in India. Indian automobile production was around 2.4 million units in 2009 while the motorcycle output was around 10 million units. The production is expected to double both for automobile and motorcycle in 2020.

Nippon Steel provides high grade hot coil for the new pipe plant while the plant procures commodity grade coil from Nippon Steel’s partner of Tata Steel and other makers in India and Southeast Asia. The new plant tries to establish competitive operation to follow growing market when the users try to expand local procurement.

Nisshin Steel established automotive pipe making joint venture with Sumitomo Corporation and local company in 2007. Toyota Tsusho Corporation decided to participate in Maruichi Steel Tube’s Indian subsidiary, KUMA Stainless Tube in September. Steel pipe is apparently introduction for Japanese steel makers to follow Indian automotive steel demand.