Nippon For Stronger Ties With Tisco

Japanese steel major Nippon Steel Corporation is exploring opportunities to increase business in the south-east Asian region.

The company has a knowledge tie-up with Tata Steel for the latter's Rs 1,600-crore cold rolling (CR) complex in Jamshedpur and is keen on extending the partnership beyond the commissioning of the CR complex.

Takashi Asamura, representative director and executive vice president, Nippon Steel, said, "We would like to have some opportunities for business in this country and we want good relations with Tata Steel for exchange of marketing and development information."

Asamura added that India has a brighter future in the global steel market than Japan, primarily due to the availability of huge raw material reserves and cheap labour, and the only solution for the Japanese steel industry's survival is technology renovation.

 

Tata Steel's knowledge partnership with Nippon would continue till the ramp-up stage, till which time the steel major would require the Japanese company's expertise in developing its CR products. Tata Steel is contemplating on renewing the contract even beyond the ramp-up stage. Till the ramp-up stage, Tata Steel plans to provide CR steel to prospective customers, such as automobile manufacturers, on a trial basis, a company spokesperson said.

The 1.2 million-tonne capacity CR complex is due for trial commissioning in May 2000 and the galvanising line has already been commissioned in January.

According to the spokesperson, "Tata Steel has identified Nippon Steel as the knowledge leader with respect to CR and this tie-up has brought Nippon Steel from a stand-off position as a competitor of Tata Steel to a mutually beneficial strategic partner. It makes sense on every front, including marketing, because Nippon Steel is one of the largest suppliers of steel to auto makers." However, both Asamura and B Muthuraman, vice-president (Project Gopalpur and CRM), Tata Steel, emphasised that the knowledge tie-up is in no way a forerunner to a marketing collaboration in the future. "Mutual benefits would be accrued in terms of sharing of market and product technology information. Tata Steel, for instance, would help Nippon to understand the requirements of the India market more effectively," said Asamura.

The future of CR, according to Asamura, would be in more environment-friendly products, with wider usage and recyclability properties and simplification in process. Tata Steel need not worry about excess capacities in the CR market because dominance in the market would be determined on the basis of strength of products.