January 25, 2012: Essar Steel India Ltd is looking at entering into joint venture with Kobe Steel of Japan for producing high-end auto grade steel in India, a senior official told ISMW.

"We have a technical agreement and Memorandum of Understanding (MoU) with Kobe Steel for making some select varieties of auto grade steel and this is a pretty long arrangement. We are actually looking at a joint venture with Kobe Steel," Essar's CEO and MD Dilip Oommen said.

"We are working with Kobe Steel as per an agreement, but as far as new project is concerned like putting up a new facility, we have not yet decided as to when we will launch it," Oommen said, adding that the key focus is on auto and AHFS grade steel.

Oommen said Essar has recently made some experiments for supply of steel for the Nano car. "The experiments have been successful and we are going for the first commercial test within a week or so for skin panel," he added.

Asked if they have any plan to produce CRM, Oomman said that is also a part of the total CRM sanctioned project that they are envisaging together with technical support from Kobe Steel.

Essar's Chief Financial Officer Amit Agarwal said, "Our focus is to become a preferred automotive grade steel supplier. But today what we have done is we have created the access and now we want to run these facilities successfully so that we are ready for the next move."

"Our larger focus is on consolidation after expanding the steel making capacity to 10 mtpa, which means that not only just technical ramping, but we have to meet the market and we have to develop the products. Unless your products are up to the mark, it is difficult to get business," Agarwal added.

Source: ISMW