Chinese companies are tapping opportunities here as India gears up to increase steel production fourfold in the next decade. The joint ventures are significant because China has traditionally imported raw materials from India, and now is attempting to export technology and expertise.
Companies such as China Metallurgical Construction Group Corp. (also known as the MCC group), Beijing Sino-Steel Industry & Trade Group (SSIT) and China Shongong International Steel Ltd are forging technology transfer deals with Indian firms in a bid to expand their presence in a space traditionally occupied by European companies.
“We are open to exploring joint ventures with Indian steel companies and iron ore miners,” said Meng Qinghai, project manager of Beijing-based SSIT, who was here to attend a steel seminar this week. SSIT has assisted in setting up 30 plants in China, the world’s largest steel producer.
The MCC group, which has global sales of more than $16 billion, has signed a technology transfer agreement with the Rs200 crore metal trading company Shabro Metals & Technologies Ltd and registered its India company, MCC India Ltd last month.
The MCC group, which has executed 90% of Chinese steel projects is handling several turnkey projects and installing equipment for companies such as Essar Steel Ltd, Tata Steel Ltd and JSW Steel Ltd.
“Chinese equipment are cost-effective because of which several European companies today manufacture them in China,” said Naveen Bablani, Shabro Metals’ vice-president for special projects.
India’s old steel plants largely depended on Russian, German and American technologies. Steel experts say as research and development work continue to be dominated by government agencies, India will need to import at least 30-40% of steel-making equipment to meet a steel production target of close to 200 million tonnes by 2020.
“We have big plans to provide technology to Indian companies but do not have any joint venture plans yet,” said Zhang Xuechang, project manager of MCC Overseas Ltd, the company which explores global ventures.
The steel equipment and installation segment is expected to see an annual growth of 20%, according to Tuhin K. Roy, business development head at SSIT.
The company has signed on several consortium partners, including Modern India Construction Co. and an associate company of Shapoorji Pallonji & Co. Ltd. SSIT has already set up a blast furnace for Bhushan Steel Ltd and is installing a 1.6 million tonnes coke oven for Hoogly Metcoke Ltd, a joint venture for Tata Steel Ltd and West Bengal Industrial Development Corp.
Ashok Tandon, president of Rs3,400 crore Lloyds Steel Industries Ltd, says Chinese technology can provide an edge in the early iron-making stage of steel production, such as setting up ore enrichment and pellet making plants.
Lloyds Steel, has signed a technology transfer deal with China Shongong and is currently executing 1.2 million tonnes pellet plant for Aryan Iron & Steel Companyin Orissa.