Tokyo: Japan’s Kobe Steel Ltd plans to launch Indian production of steel by 2009 using its technology to keep raw material costs down to a third of current levels, a report said today.
Kobe Steel is in talks with India’s Chowgule Group to build a steel mill in the southwestern state of Goa, the Nikkei business daily reported, without identifying sources.
The mill will be able to produce 500,000 tonnes a year with the Japanese firm’s investment coming to 20 billion yen ($165 million or Rs669 crore), it said.
The two companies are expected to reach a final agreement over the next few months and begin construction by year-end, it said.
In addition to India, Kobe Steel is in talks with a US electric furnace steelmaker to begin construction of a mill in the state of Minnesota by the end of this year, while considering production also in Australia, it said.
As the steel industry restructures worldwide, Japanese steelmakers are also racing to go global.
Nippon Steel, the world’s second largest steelmaker after the recently formed Arcelor-Mittal behemoth, is in talks with Tata Steel, one of India’s top conglomerates, to produce steel sheet for Japanese automakers operating in India as early as 2010, reports said earlier.
Japanese automakers — major customers of Japanese steelmakers — have been stepping up their presence in India, which is posting rapid economic growth. Suzuki Motor Corp holds a majority stake in Maruti Udyog, India’s largest carmaker.