Mumbai: Tata Steel is in talks with Nippon Steel, of Japan, the world's second-largest steelmaker after Arcelor Mittal, for joint production of alloy steel that is used in the production of automobiles and other manufacturing industries.
Sources at the two companies also confirmed that the steel majors are in the process of finalising details of joint production.
A Nippon Steel statement confirmed that discussions were underway but gave no details of the proposed venture. "We are in talks with Nippon Steel for joint production of steel to meet rising demand from automotive sector,'' reports quoted Tata Steel sources as saying.
Reports in Japanese media said the companies are likely to invest about Rs2,000 crore ($423 million) in a plant for production of thin-sheet steel mainly used in automotive bodies.
The plant, using Nippon's technology, would be able to produce about one million tonnes of steel a year. The proposed plant would meet the demand from automakers, including Japanese companies like Suzuki Motor, Toyota and Honda, in India where many of these firms have set up manufacturing units.
Tata-Nippon cooperation follows Tatas' $12-billion acquisition of Corus Group Plc, taking the combined entity to the fifth spot in global steel ranking with an annual production capacity of 24 million tonnes.
Tata steel, meanwhile, signed an agreement for acquiring 100 per cent stake in Rawmet Industries, a Cuttack-based ferroalloy company for Rs101 crore.
Rawnet, has a ferroalloy plant near Cuttack, with two semi-closed electric arc furnaces, having a production capacity of around 50,000 tonnes of high carbon ferro chrome per annum.