Kobe Steel, SAIL Sing MOU for Comprehensive Collaboration

Kobe Steel announced on Tuesday the firm signed memorandum of understanding with Indian steel major, Steel Authority of India (SAIL) for comprehensive strategic collaboration. They seek cooperation opportunity from raw materials and upstream operation to downstream including rolling and processing to follow growing Indian market. They already study potential joint venture with Kobe Steel’s new iron making process, ITmk3. Kobe Steel tries to develop Indian market for future growth through the cooperation while the firm already has comprehensive tie-up with other Indian steel maker, Essar Steel.

Kobe Steel and SAIL agreed on joint study for potential cooperation in projects and technology items in steel and steel related areas both in India and other areas. Kobe Steel’s president Hiroshi Sato and SAIL’s chairman C. S. Verma signed the MOU in the presence of Secretary (Steel) Government of India P. K. Misra in Tokyo. They launch special team to realize the cooperation.

SAIL is Indian largest steel maker with annual 14 million tonnes of raw steel output. The firm has many iron ore and coking coal mines. The firm studies to utilize ITmk3 process as a part of the expansion and conducts feasibility study with support by Kobe Steel. Kobe Steel has world top class technology in high valued steel products, pellet and direct reduced iron process. They try to combine each strong point to seek projects with mutual benefit through the cooperation.

Kobe Steel already entered into comprehensive cooperation agreement with Essar Steel in November 2008 and reached technical support agreement for automotive outer panel while SAIL has cooperation with POSCO. Kobe Steel and SAIL exclude some items from the new cooperation when the items are covered by existing cooperation.

Indian steel demand will increase by 14% to 68 million tonnes in 2011 from 2010, according to World Steel Association. The demand increases for commodity grade steel products for construction. The demand also increases for high valued steel products in automobile and construction machinery when Japanese manufacturers increase the operations in India. Japanese major steel makers including Nippon Steel try to follow the growing demand in India through partnerships with local makers in order to grab the market before the rivals increase the presence in India.